I'm getting more than a little tired of hearing Republican politicians say, "That's not a stimulus, it's just spending." This is moronic. It's like saying, "That's not a dessert, it's just a chocolate sundae."
Every dollar that the government spends to buy stuff stimulates the economy because it triggers economic activity. This is true if the government refurbishes the National Mall or extends broadband service to rural areas or purchases new cars for government use -- all measures Republicans have erroneously claimed aren't "stimulus". For each and every one of these measures, the government will buy stuff, directly injecting additional spending into the economy. The people who are employed to make and do the stuff that government buys will receive wages, which they'll spend on other stuff that still other people will be paid to make and do, and so on and so forth. Stimulus. This is true no matter what the government buys.
Of course, we should try to get the biggest bang for our stimulus buck, so by all means let's try to buy as many things as possible that will solve real world problems and help to create a greener, more productive, and more efficient economy that will take the fullest possible advantage of the eventual upturn. But the first priority of a stimulus is to stimulate the economy, and that's best done by spending.
Republican complaints about the individual elements of the current stimulus bill are incoherent and demagogic, but they're most starkly out of step with Republican attitudes toward tax cuts, which receive no skepticism at all. For example, Republicans stubbornly ignore that most of the tax cuts they propose would be saved, and not spent. Only those individuals who can't afford to save would spend a tax cut windfall, and businesses that already have excess capacity won't respond to a tax cut by investing more when consumers aren't buying the goods already stacking up in their warehouses.
Moreover, Republicans assume that all of the additional spending from individuals and businesses would be "stimulus". Unlike government spending -- which is only "stimulus" if it has obvious utility to Republicans -- private spending is always considered "stimulus", no matter what it's spent on. If Republicans are right about government spending being "stimulus" only some of the time, they're obviously wrong about private spending being "stimulus" all of the time.
As an initial matter, individual purchases of imports stimulate other countries' economies, not ours, so we can see from the start that some private spending won't, in fact, always be "stimulus". But what of the rest? Shouldn't there be some accountability here? How do we know that these people won't just go out and waste their tax cuts on booze and gambling? How would booze and gambling simulate the economy? (Since similar purchases by the government wouldn't be a "stimulus", it obviously wouldn't be "stimulus" if individuals landscaped their yard or signed up for broadband or bought a new car, right?) Maybe people should only get tax cuts if they spend the money on things that Republicans agree have utility.
Needless to say, that's not how the Republicans see it, but the point is that there's no rational basis for them to see it the way they do. When individuals spend money, it stimulates economic activity no matter what they spend it on. It would be better if they spent it on things like shoes for the kids instead of booze at the track, but it stimulates the economy either way. The problem is that individuals have cut way back on their spending, and to the extent they can afford to do so, they'll keep right on doing so. Therefore, in the short run, government has to increase its spending to make up some of the difference, so the economy doesn't fall into a deflationary spiral that no one knows how to get out of. We should get the biggest bang for the buck that we can, but every dollar the government spends is stimulus, just as every additional dollar that individuals spent would be stimulus -- if individuals were spending.
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