Tuesday, January 26, 2010

Calling a Bluff?

Kevin Drum is trying to figure out the rationale for the spending freeze.

How about this: We've got those newly-converted deficit hawks hollering that the government is spending too much. So give them a spending freeze and watch them holler about their favorites being cut out.

Since President Obama seems to be willing to try to face up to some of the things we've been choosing to ignore for some time, maybe this is a way to point up that you can't have spending on everything and lower taxes too.

4 comments:

Andy said...

I think the problem is that the President has surrounded himself with academics and political people. This seems like an obvious effort to stem the criticism of the huge increase in government spending with little to show for it, but I'm fairly certain this political move is only going to be counterproductive. It just proves to me the President has lost his connection with the electorate and is ensconced in the Washington political bubble.

Cheryl Rofer said...

Except this has very little to do with my post. I'm beginning to wonder if Andy is merely a troll for Republican memes.

Anonymous said...

Lower taxes and higher spending is classic Keynesian economics--it is usually associated with the FDR Democrats, as Ronald Reagan presaged supply-side economics. Bush was a Keynesian, not a supply-sider, so he's more inline with FDR Keynesianism than Reagan Republicans.

The problem with Obama's spending bill is that he was trying to time the spending to the 2010 election. Instead of keeping unemployment low in 2009, he let it get above 8% so he could try to take credit for a recovery in 2010. It was a huge mistake.

A spending freeze would probably hurt.

Andy said...

Cheryl,

Ok, rereading what I wrote I see that I didn't explain myself well. So here's my theory behind the "freeze" that I hope is a bit clearer:

I think the motivation is primarily political in the sense that the President wants to address public concern about the deficit. However, this proposal has two problems. To begin with, it's small enough that it could hurt the economy in the short term while doing nothing substantive about long-term fiscal unsustainability (See Krugman and Delong). Secondly, it's likely to be counterproductive politically, especially if it's a major part of the SOTU speech. It won't gain him much, if any GoP support, it's unlikely to garner significant independent support, and the suggestion has already angered much of his base. So I'm left wondering what the political upside is.

Now, tying into my previous comment, it seems to me this is indicative of a lot of problems the President's had lately and I do think his advisers are part of the problem. People are worried about their jobs much more than deficits and making this freeze a "major component" of the SOTU speech is problematic IMO.

Ok, I'm off to meet my GoP handlers to continue the great conspiracy to troll this blog. That was a joke, in case you were wondering.