Subject: [Out_Of_The_Frying_Pan] Re: [progressivesforobama] The Spending that Wasn't: Still Another Reason for a Popular Front vs. Finance Capital
To: progressivesforobama@yahoogroups.com
Cc: Out_Of_The_Frying_Pan@yahoogroups.com, "Carl Bloice" <cbloice@comcast.net>, "Carl Davidson" <carld717@aol.com>
Date: Tuesday, October 12, 2010, 12:57 AM
It is not that the "size" of the stimulus spending was inadequate; Krugman shows his true colors on this one... its the fact that all this money was turned over to the private sector.
Those of you in the Progressives for Obama have been afraid to criticize Obama at the time he is making decision every single time.
Anyone can understand that it will take government becoming the employer of first choice in order to get the most "bang for the buck;" more jobs.
You berated alternatives like spending for a national public health care system and a national childcare system because you knew that it would embarrass Obama. Between the two programs some 15,000,000 jobs would be created and still at this late date you refuse to advocate for specific solutions to specific problems.
All of this and more can be paid for by ending these dirty wars and "taxing the hell out of the rich." A federal bank should be created to borrow at substantially lower interest rates so tax-payers reap the profits in interest rates and not Wall Street bankers.
Mark Dayton is calling for "tax the rich" in his campaign for Governor of Minnesota and Virg Bernero running for Governor in Michigan is calling for Michigan to create a state bank like The State Bank of North Dakota.
The Progressives for Obama run away from these concrete suggestions as Barack Obama and the leadership of the Democratic Party is mounting pressure on both Bernero and Dayton--- in fact, their campaigns are being sabotaged by the state and national Democratic Party.
Are you waiting for Paul Krugman to endorse these two ideas? If so, I hope you are holding your breath.
In fact Barack Obama is a HUGE spender; the problem is, not as Krugman claims the spending is too small; the money is not being spent in the correct way with the federal government becoming the employer of first choice investing our tax dollars solving the problems of working people--- solving the problems of working people is what creates jobs. We need to work our way out of this capitalist economic depression not spend our way out... in fact, Barack Obama and Wall Street are afraid to create the kind of massive universal social programs required because they see that once these programs work, they will be defended by the people--- Social Security and public education being perfect examples.
Wall Street apologists and Sooth-sayers are definitely afraid of people realizing that socialism works.
Alan L. Maki
58891 County Road 13
Warroad, Minnesota 56763
Phone: 218-386-2432
Check out my blog:
http://thepodunkblog.blogspot.com/
--- On Mon, 10/11/10, Carl Davidson <carld717@gmail.com> wrote:
From: Carl Davidson <carld717@gmail.com>
Subject: [progressivesforobama] The Spending that Wasn't: Still Another Reason for a Popular Front vs. Finance Capital
To: "progressivesforobama" <progressivesforobama@yahoogroups.com>, "moderator" <moderator@portside.org>, the-rag-blog-group@googlegroups.com
Date: Monday, October 11, 2010, 12:36 PM
October 10, 2010
Hey, Small Spender
By PAUL KRUGMAN
Here’s the narrative you hear everywhere: President Obama has presided over a huge expansion of government, but unemployment has remained high. And this proves that government spending can’t create jobs.
Here’s what you need to know: The whole story is a myth. There never was a big expansion of government spending. In fact, that has been the key problem with economic policy in the Obama years: we never had the kind of fiscal expansion that might have created the millions of jobs we need.
Ask yourself: What major new federal programs have started up since Mr. Obama took office? Health care reform, for the most part, hasn’t kicked in yet, so that can’t be it. So are there giant infrastructure projects under way? No. Are there huge new benefits for low-income workers or the poor? No. Where’s all that spending we keep hearing about? It never happened.
To be fair, spending on safety-net programs, mainly unemployment insurance and Medicaid, has risen — because, in case you haven’t noticed, there has been a surge in the number of Americans without jobs and badly in need of help. And there were also substantial outlays to rescue troubled financial institutions, although it appears that the government will get most of its money back. But when people denounce big government, they usually have in mind the creation of big bureaucracies and major new programs. And that just hasn’t taken place.
Consider, in particular, one fact that might surprise you: The total number of government workers in America has been falling, not rising, under Mr. Obama. A small increase in federal employment was swamped by sharp declines at the state and local level — most notably, by layoffs of schoolteachers. Total government payrolls have fallen by more than 350,000 since January 2009.
Now, direct employment isn’t a perfect measure of the government’s size, since the government also employs workers indirectly when it buys goods and services from the private sector. And government purchases of goods and services have gone up. But adjusted for inflation, they rose only 3 percent over the last two years — a pace slower than that of the previous two years, and slower than the economy’s normal rate of growth.
So as I said, the big government expansion everyone talks about never happened. This fact, however, raises two questions. First, we know that Congress enacted a stimulus bill in early 2009; why didn’t that translate into a big rise in government spending? Second, if the expansion never happened, why does everyone think it did?
Part of the answer to the first question is that the stimulus wasn’t actually all that big compared with the size of the economy. Furthermore, it wasn’t mainly focused on increasing government spending. Of the roughly $600 billion cost of the Recovery Act in 2009 and 2010, more than 40 percent came from tax cuts, while another large chunk consisted of aid to state and local governments. Only the remainder involved direct federal spending.
And federal aid to state and local governments wasn’t enough to make up for plunging tax receipts in the face of the economic slump. So states and cities, which can’t run large deficits, were forced into drastic spending cuts, more than offsetting the modest increase at the federal level.
The answer to the second question — why there’s a widespread perception that government spending has surged, when it hasn’t — is that there has been a disinformation campaign from the right, based on the usual combination of fact-free assertions and cooked numbers. And this campaign has been effective in part because the Obama administration hasn’t offered an effective reply.
Actually, the administration has had a messaging problem on economic policy ever since its first months in office, when it went for a stimulus plan that many of us warned from the beginning was inadequate given the size of the economy’s troubles. You can argue that Mr. Obama got all he could — that a larger plan wouldn’t have made it through Congress (which is questionable), and that an inadequate stimulus was much better than none at all (which it was). But that’s not an argument the administration ever made. Instead, it has insisted throughout that its original plan was just right, a position that has become increasingly awkward as the recovery stalls.
And a side consequence of this awkward positioning is that officials can’t easily offer the obvious rebuttal to claims that big spending failed to fix the economy — namely, that thanks to the inadequate scale of the Recovery Act, big spending never happened in the first place.
But if they won’t say it, I will: if job-creating government spending has failed to bring down unemployment in the Obama era, it’s not because it doesn’t work; it’s because it wasn’t tried.
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