"When the economy's not strong there's a lot of interest in controlling spending," Nelson said.
Oh hi, Republican Rep. Paul Ryan. What's it like inhabiting the body of Sen. Nelson?
I think Yglesias strikes exactly the right tone:
This is nuts. With the economy weak Nelson wants to do . . . what? Lay off teachers? Halt infrastructure projects? Make sure that kids whose parents are unemployed end up malnourished? The economy is suffering from a catastrophic collapse in overall spending with households, businesses, states, and municipalities all pulling back. If the federal government pulls back too we're going to go down the drain.Exactly, but it's not just nuts from a policy perspective. It's political suicide. Even President Bush was signing fiscal stimulus plans in 2008 when the downturn looked more like a windy ripple than a tsunami.
And look at this tsunami! Today almost 20 percent of the workforce is considered unemployed or marginally attached. The White House expects unemployment to stay above 9.5 percent until the midterms, and there's little indication we'll be under 10 percent by the end of next summer. Our long-term deficit is serious, but our short-term unemployment is an anchor tied to both the consumer economy and the Democrats' electoral advantage in both houses of Congress. Short-term employment stimulus -- in the form of payroll tax reductions, state aid or hiring tax credits for companies -- is an absolute must, and Ben Nelson is either masochistic or oblivious to think otherwise.
It all depends on what you think the "normal" state of the economy is. If you think the last 20 years has been a debt-fueled splurge that's unsustainable, then all you are doing with these stimulus programs is running up more debt.
In that view, we don't need more shopping malls, more McMansions, and we can't afford the government services, salaries and pensions for government workers. We can't afford the Social Security and Medicare promises we've already made, let alone ObamaCare.
In that view, we need to cut back to what we can actually afford before the budget implodes. We don't need money wasted on stimulus, guarantees of worthless bank assets, etc.
On the other hand, maybe you think the housing bubble was "normal". That we just need to get back in the groove and housing prices will start going up 20% a year again. That investors will all rush into CDOs again. That somehow we'll cut the cost of health care by promising more of it. And that Cap and Trade will cause energy prices to fall instead of rise.
If you believe all of that, stimulate away! It's only money.
They definitely don't know how to prioritize a budget.
What is important - necessary even - to spend money on? Adjust spending accordingly.
You could look at the projects in the stimulus bill and know, just know, that it was full of waste. Yet it passed before anyone read it.
It over promised and under delivered.
Wash. Rinse. Repeat with a health care financing bill.
There is a big difference between temporary stimulus and the creation of a permanent entitlement that will be a new drain on the federal coffers in the way that medicare and social security are. there is lots of evidence that the health care bill creates that kind of entitlement. while the point is taken that trying to fix the budget deficit is not an appropriate strategy in a downturn, there's also a strong argument that establishing a massive new entitlement, rather than focusing on the structural problems of the economy, is similarly irresponsible, especially when that entitlement is going to likely add to the costs facing the average household.