Jack Cafferty Thinks Republicans Are Cool Again

Cross posted at MotleyMoose

I've always been skeptical of Jack Cafferty. I always felt like the guy made a living out of being outraged that sometimes he forgets what he's outraged about.
I skimmed CNN.com today and what I found was the latest commentary from Mr Outrage. My jaw dropped;

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Republicans don't know how to stimulate the economy.

I've been watching these debates in the Senate for three days and I'm very disappointed by the way the Stimulus Bill is turning out.  As it stands now they have put 42% of the Bill as TAX CUTS.... and tax cuts don't stimulate a thing!

Because of the 60 vote minimum needed to pass this thing in the Senate, Democrats have let Republicans re-insert the very things that caused the economy to dive into the pits over the last eight years... TAX CUTS!

This is a STIMULUS BILL! That means we have to SPEND MONEY that will go into the economy and be re-spent two or three times. It has to be money spent to make people BUY THINGS!

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Government spending is better economic stimulus than tax cuts

Paul Rosenberg has an outstanding post up at Open Left on a report by Mark Zandi, the chief economist and co-founder of Moody's Economy.com. Zandi analyzed different types of tax cuts and government spending in terms of "fiscal stimulus bang for the buck."

Click here to view the chart showing his conclusions. Various types of government spending all delivered much more stimulus to the economy than even the most effective tax cuts.

Temporary increases in food stamps carried the most "bang for the buck," $1.73 for every federal dollar spent. That's because food stamp money goes into the hands of people who will spend it right away. Not far behind was extending unemployment benefits (which also helps people likely to spend money quickly) and government spending on infrastructure (which creates jobs).

Zandi found that even the government spending that delivered the least bang for the buck, general aid to state governments, still generated $1.38 for every federal dollar spent.

On the other hand, most tax cuts generated far below $1 for the economy for every dollar they cost the federal government. That's particularly true for the tax cuts Republicans tend to favor, which mainly benefit high-income Americans or businesses. These generate between 25 and 50 cents for the economy for every dollar they cost the federal government.

By far the best tax cut for stimulating the  economy, according to Zandi, was a payroll tax holiday, which generates $1.28 for every dollar it costs. However, a payroll tax holiday still ranked significantly below various types of spending in terms of "bang for the buck."

Rosenberg created a second chart combining Zandi's figures with job creation numbers from the Center for Economic Policy and Research. It shows that millions more jobs would be created by $850 billion in spending compared to $850 billion in tax cuts.

Not only does government spending create more jobs and stimulate more consumer spending, it can also accomplish tasks that benefit the community as a whole. For instance, everyone who uses a bridge benefits from maintenance that prevents that bridge from collapsing. Thousands of travelers could take advantage of improved passenger rail service, which would also reduce greenhouse-gas emissions compared to driving or flying. For those reasons, I agree with the state legislators from the midwest who have advocated more rail funding in the stimulus bill.

Iowa Senator Chuck Grassley derides the stimulus spending as "porkulus," but yesterday the Iowa Environmental Council made the case for another infrastructure program that would have huge collateral benefits: upgrading substandard sewage and drinking water systems.

President Barack Obama and Democratic leaders in Congress need to do a better job explaining that the spending in the stimulus bill would directly boost the economy much more than tax cuts.

On a related note, I recommend reading Theda Skocpol's comment published today at Talking Points Memo.

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Weekly Audit: Stimulus Stagnation

by Zach Carter, Media Consortium MediaWire blogger 

Despite a lofty launch last week, the good ship Bipartisan is sunk, at least so far as the economic stimulus is concerned. President Barack Obama and House Democrats bent over backwards to appease the GOP by including several tax breaks and excluding a major anti-foreclosure measure from the package, but when it came time to vote, zero House Republican backed the bill. Lawmakers who actually care about the fate of the U.S. economy are furious. Every day spent haggling with obstinate Republicans means heavier economic damage. What's more, many of the tax breaks the GOP insisted on are simply terrible policies, whatever the economic climate.

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I love Bob Herbert!

In his column in today's NY Times, Bob Herbert took on the Republicans and their actions to impede Obama's Stimulus Package. Here is a small section which I think sums it up pretty well:

The truth, of course, is that the country is hemorrhaging jobs and Americans are heading to the poorhouse by the millions. The stock markets and the value of the family home have collapsed, and there is virtual across-the-board agreement that the country is caught up in the worst economic disaster since at least World War II.

The Republican answer to this turmoil?

Tax cuts.

They need to go into rehab.

I'm not sure rehab would be enough.

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