The Senate this week defeated a package of domestic aid programs for fears that it would further increase the federal deficit.
As the Washington Post reported, "Even the state aid that Obama last week called critical to preventing the layoffs of hundreds of thousands of teachers and other government workers is foundering. After days of talks, frustrated Democratic leaders in the Senate failed again Thursday to muster the 60 votes needed to approve the cash and left town for the weekend with no clear path forward."
"Fiscal stimulus "is not a particularly effective strategy. So let's just stop," said Douglas Holtz-Eakin, a former CBO director who advised Republican Sen. John McCain presidential campaign."
Yes, and I suppose prosperity is just around corner, provided that we let the free market work its magic? Republicans are apparently channeling Herbert Hoover, whose belief that we should just let the Depression run its course caused GDP to fall nearly 30% in the three years following the stock market crash. President Roosevelt by contrast did not see the federal deficit as a reason to curtail demand-side economic stimulus. As a result, by late in FDR's first term GDP was back to pre-Depression levels.
Actually, Democratic Barney Frank of Massachusetts is leading the charge on some serious deficit reduction, and I hope he succeeds.
First, some context. The following is not a typo:
US Defense spending 2001: $366 billion
US Defense spending 2011: $929 billion
Yes, among the many ways in which 9-11 was a godsend to conservatives is the fact that we have nearly tripled defense spending in a decade. Here's another interesting statistic: We spend almost as much on defense as the rest of the world combined. The panel commissioned by Congressman Frank is recommending nearly $1 trillion in cuts to the Pentagon’s budget during the next 10 years, principally by reducing the nation's nuclear arsenal and our overseas presence while eliminating unneeded weapons programs.
The Frank panel including some Republicans, so its recommendations might have some hope of getting past the Republican policy of "stop all Democratic proposals by any means necessary." Let's hope so.