Saturday, July 9, 2011

Econ 101 repeated

Every Saturday the Times News asks five people a question and prints their pictures and their answers.  Today’s question was “President Obama keeps telling us that the economy is improving.  Do you think this is true?”
A woman from North Carolina said she couldn’t “...see improvement when the numbers keep getting deeper into the red.”
I could say something snide about her, but this woman’s misunderstanding seems to be shared by almost every Republican member of Congress and even President Obama, who said last week, “Government has to start living within its means, just like families do.  We have to cut the spending we can’t afford so we can put the economy on sounder footing....”
He is dead wrong.  Perhaps he says things like that because he thinks it will win him votes, which makes him less than honest.  Perhaps he says them--and I hope not--because he really believes them.
Government should not cut spending in a recession.  It should increase spending.  It should pump money into the economy.  Government is not like a family.  That analogy makes no sense.  Government can cut taxes or increase spending, but the LAST THING IT SHOULD DO IS DECREASE SPENDING.  Government can address the deficit when the economy is good (remember Clinton).  Right now these budget-cutting moves at the state and federal level are a major reason the unemployment rate stands at 9.2%.
When is the last time you heard a Republican congressman talk about unemployment as a major issue?  At least the President seems worried about people out of work, but he needs to push policies that will help them.  

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