The progressive argument goes that the current economic conditions and run up of the deficit are all Bush's fault. If you listen to Paul Krugman and others, it goes on further to say that the $800 Billion economic stimulus wasn't nearly big enough - should have been even larger. Well, for clarification, lets see what Robert Reich (former Clinton Administration Labor Secretary and noted progressive) says on his own blog today:
"Before I turn to the President, though, let’s be clear: The lousy economy is due to insufficient demand. Consumers – who are 70 percent of the economy — can’t and won’t buy because they’re running out of cash. They can’t borrow against homes that are worth a third less than they were five years ago, and most consumers are bad credit risks anyway because they’re losing their jobs and their wages are dropping. They also have to start saving for the kids’ college or for retirement, which will cut their spending even more.
Without enough consumers, businesses won’t hire enough people and pay them enough to reverse the vicious cycle. So we’re dead in the water. Even the stock market has caught on to the truth."
So, let me get this progressive argument straight 'cause I am just a dumb Iowa farm boy: The economy is bad because consumers are running out of cash and can't stimulate demand? Did I get that right? So, the Bush tax cuts which leave more cash in consumer pockets were bad? Massive stimulus spending by the federal government that creates debt that must be repaid through higher taxation that takes cash out of consumer pockets is good? It would be better for the economy to take a "balanced" approach that includes both increased revenues (higher taxes) and decreased spending rather than simply spending less and lowering tax burden? Wait a minute, did Reich say that business won't hire enough people and pay the enough to reverse the cycle? I thought our president said that businesses (i.e., corporations) were getting a pass and not paying their fair share? Is Reich saying that Corporations need to make a profit so they can hire workers and pay wages, leading to consumer demand and a better economy? Even to my simple understanding of economics that seems sort of like a contradiction.
Mr. Quarter needs to get a book because this whole economics thing is really confusing.