Tuesday, January 26, 2010

U.S. Economy - Salon.com

For a "Smart Person" (that is, a member of the Smart Person Party), Robert Reich doesn't exhibit much common sense.

U.S. Economy - Salon.com: "The bigger news is Obama is planning a three-year budget freeze on a big chunk of discretionary spending. Wall Street is delighted. But it means Main Street is in worse trouble than ever.
A spending freeze will make it even harder to get jobs back because government is the last spender around. Consumers have pulled back, investors won’t do much until they know consumers are out there, and exports are minuscule."


I'm not sure how this is a problem for Main Street. There is no government spending that helps Main Street and I defy anyone to come up with logic that shows how it can create long-term, private-sector employment. If we assume a consumer-driven economy, it makes no sense to build bridges and give money to day care providers. The only way to create jobs is to put more money back in the hands of the consumer.

If you can show me how it works with government spending, I'm all ears. It has not worked in the past, it won't work now. Plan on a long, hard 2010. And not in a good way.

5 comments:

Dad29 said...

Well, there is one area in which Gummint spending helps, and that is defense.

See Oshkosh Truck, or Grumman, or (etc.)

That's the area which Obama intends to cut, of course.

Ordinary Jill said...

Government employees are also consumers. If you lay off a bunch of them, there will be fewer consumers with money to spend.

Deekaman said...

And less tax money into the bureaucracy that produces nothing....On balance, I think fewer government bureaucrats is a plus.

Realism said...

There is no government spending that helps Main Street and I defy anyone to come up with logic that shows how it can create long-term, private-sector employment.

It's unfortunate that you are unfamiliar with the principle of "priming the pump". But hey, what do all those economist eggheads know anyways, right?

Deekaman said...

Not unfamiliar. It just hasn't and doesn't work. Ever. But I'm sure you will be happy to provide ma a case where it has.