Republicans Scamming America on Obama's Stimulus Plan
5. When you want to stimulate the economy, tax cuts always beat government spending hands-down.
Another conservative fantasy that disintegrates on contact with reality.
The chart that shows the effectiveness of various forms of government stimulus, based on recent attempts, is here. (Conservatives will be infuriated to learn that food stamps come out on top, generating $1.73 for every dollar spent. Infrastructure investments come in a respectable third. The bottom half of the chart is wall-to-wall tax cut schemes.)
The problem with tax cuts is that people don't spend them in ways that get the economy moving. The Wall Street Journal reports that only 10 to 20 percent of the money remanded to taxpayers in the 2008 tax rebate actually got spent. The other 80 to 90 percent ended up in people's personal savings, were used to pay off creditors, or were simply absorbed by inflation and higher living costs.
Knowing this, we're a bit dismayed Obama is proposing to sink as much as 40 percent of his stimulus package into tax cuts. That's too much, if you ask us. But at least they're targeted at the middle class -- people who are more likely to spend that money here in the U.S., rather than ship it off to investments abroad.
6. Large-scale government investment would inevitably turn into an orgy of waste, fraud and abuse.
True -- but only if we let conservatives run the show.
The fact is that all human endeavors -- from running a household to running a nation -- entail a fair amount of waste, fraud and abuse. Bad decisions get made. Greed gets the better of people. Not everybody is as honest as we'd wish them to be.
But in spite of that truth, nobody in history can top the Americans when it comes to planning and executing successful large-scale investment projects. (A thousand years from now, that's what they'll be saying about us: Not always smart about foreign policy, but man, could those people think big -- and they usually pulled it off, too.) In our happier past, good management, careful oversight, and clear accountability have always gone a long way toward preventing really big problems, and ensured that we got the most for our collective buck.
Unfortunately, if we've learned anything about conservatives at this late date, it's that they'll defang or dismantle these mechanisms every chance they get. They think rules are for lesser mortals, oversight is a form of Big Brother-style oppression, and accountability is for people who can't afford lobbyists and lawyers. I don't think anyone would even try argue any more that when it comes to waste, fraud, and abuse, conservatives are the hands-down experts.
What's ironic is that they're now offering edifying moral guidance to the rest of us on the subject. All you can do is point and giggle at the stupefying hypocrisy of it all.
