NY Times columnist and Nobel Prize winner Paul Krugman recently tore apart the stimulus plan Democrats are putting together in Congress. His concern: Dems were relying too much on tax cuts to win Republican support.
Count U.S. Rep. Paul Ryan, R-Janesville, among those Republicans skeptical of the proposed stimulus plan. Ryan appears ready to try and crash Democratic efforts to defibrillate the economy in pursuit of tax cuts and what he calls "tax certainty." Of course, these cuts and certainties benefit the wealthy because you can't cut taxes on people who don't pay taxes.
What's interesting about Ryan's strategy is: 1.) Economists believe increased government spending is the only way to pull the entire economy out of a looming Depression. 2.) More traditional methods, like massaging interest rates, have failed. 3.) People need jobs now. They don't have a year or two to wait for tax cuts to possibly create jobs down the line. 4.) Ryan voted for the $750 billion bank bailout, which passed, and the $14 billion auto bailout, which failed.
Here's a summary of Ryan's thinking on the stimulus plan:
"We're talking about a nearly $1 trillion plan we haven't even seen yet that they're suggesting we pass in the next few weeks. I'm worried that in the stampede to pass something, we will have pushed through Congress hundreds of billions of dollars that may not help stimulate the economy."
-Jan. 7, Milwaukee J-S
“A much higher level of government spending and increased deficits is going to sharply raise our debt service costs and weaken the dollar. Although the long-run costs of the proposed stimulus are real, the long-run benefits are highly suspect. In fact, we have seen time and time again that these temporary fiscal spending packages simply provide one or two quarters of ‘pop’ before the economy simply reverts back to its pre-stimulus trend. That is because they do nothing to change the main factors driving our long-term growth trajectory. If higher government spending led to robust economic growth, our economy would be soaring along right now instead of entering a recession."
-Oct. 20, House Budget Committee meeting
"I don't think the evidence is very good that massive federal government spending actually grows the economy."
-Jan. 6, Dow Jones news service