I really wonder what Republicans think government SHOULD do

Hyperbolic headline aside from ThinkProgress, this letter from GOP leaders urging the Fed not to do anything to boost the economy is pretty alarming.

It’s worth mentioning that there is a dual problem happening: a collapsing economy and a ballooning deficit. Federal belt-tightening is only going to exacerbate the former, and trying to convince the Fed to stay out of the situation is pretty much trying to keep the government from using one of its best tools.


5 responses to “I really wonder what Republicans think government SHOULD do

  1. As a matter of curiosity, has the Government meddling in the economy EVER solved a problem?

    • @wizard.prang You do realize that the only reason there is an economy at all is that the government set it up, right? It’s not like “the economy” is this independent faction of our world that sits devoid of regulations and government assistance.

      You know what an economy looks like with no government? A barter system in a tribal country. Governmental “meddling” is why we have currency, why there are monopoly laws, why there are protections for employees (see: Triangle Fire), why there are anti-discrimination laws, why products have safety regulations, and that’s just scratching the surface. Government “meddling” is what keeps the economy functioning.

  2. Hmmm… I ask a simple question — and instead of answering it, you set up and beat down a straw man that has nothing to do with my point. Nice.

    The Federal Government does not “set up economies” — the economy was there long before Washington ever thought of “assisting” it. Currency, banks and stock exchanges were all in existence before they were — they create the money and the laws. But they don’t enforce them — no amount of legislation and interference can make someone do the right thing. The free market is best at enforcing good behavior, with the courts and the police getting involved when that doesn’t work.

    But all of this has nothing to do with my original question; Federal monetary stimulus proposals. Since the Great Depression (at least), the Federal Government has tried time after time to solve the problem of poverty and shore up a poor economy by creating schemes to stimulate the economy and create employment. Has this ever worked? And if not, why do we think it will work now?

    Like you, I see the problem, but I also look at Washington’s miserable track record — on both sides of the aisle — of attempting to manipulate the economy, and it is not very impressive. Perhaps that’s because “Managing the economy” was never in their job description. Does this mean that I agree with the Republicans? No, both sides are in the pockets of big business. But like immigration and healthcare, there is no solution without lots of pain and lost votes, so for the most part they will do as little as possible in the hope that thy can kick the problem down the road.

    It is clear to me that when we abandoned the wisdom of the Constitution in order to create a better society, we made mistakes that have now come back to haunt us.

    • @wizard.prang You’re using a faulty logic set here, that suggests that “economy” and “government” are separate. That was my main point. The government doesn’t “meddle” in the economy, the two are intertwined. And yes, government meddling works quite frequently. Look at, again, monopoly laws, labor regulations, and things like minimum wage.

      The question isn’t “whether” the gov’t should intervene, but HOW. Paul Krugman has articulated multiple times that the success of the New Deal was mitigated by it not being extensive enough, and the stimulus has produced up to 3.3 million jobs according to recent estimates, possibly more had Republicans not crippled it.

      I agree that Washington doesn’t have the courage to do what’s necessary, but what’s necessary is a very extensive, deep, and convicted set of measures to kick start the economy again, NOT go further hands off. Don’t forget, one of the HUGE reasons the recession started was the repeal of the Glass-Steagal act (and why Phil Gramm’s political aspirations were torpodoed).

      • @Hanlon I just looked up the word “economy in several different dictionaries, both online and off — and none of them mentioned the word “Government” 🙂

        Monopoly laws aren’t working. They broke up Standard Oil and Ma Bell, and both have been madly trying to get back together ever since. We now have Oligopolies in the Banking, Oil, Cellphone carrier, Cable TV etc. industries. Labor regulations have become irrelevant (for one thing, the minimum wage is below the poverty line, for another, illegals are apparently employed with impunity). They all started off as good ideas (like seatbelt or Crash Helmet laws), but many became meaningless or even counterproductive (air bags can kill, and cannot be turned off, for example).

        As for the Krugman, that sounds perilously close to “if we throw more money at the problem it will go away.”

        For the first 150 years of this country’s existence, the Government’s involvement in the economy was minimal. According to the Constitution, their involvement was supposed to be limited to regulating interstate and international commerce, but that seems to have gone by the boards. My point: if the government is intertwined in the economy, it is by choice, not by necessity.

        As a rule I believe that the free market works best.. except when it doesn’t. Glass-Steagal was one of the few instances where Federal regulation was warranted; the (Interstate) Banks had proven that they could not be trusted to do the right thing and “guard rails” had to be put up. A few decades later, they begged, pleaded (and paid?) the Feds to remove the guard rails… and promptly drove the bus off the cliff.

        Even this would have been ok… if the bus had been allowed to hit bottom and go “splat”, but they didn’t; they bailed out the banks with our money.

        I would have loved to see at least one of those “too-big-to-fail” banks go to the wall. While the loss of jobs would be lamentable, it would, at least, have given the others some incentive to behave themselves.

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