This article explains why I am not enthused with either the president and his plan, or the Repubs and theirs right now:
With President Obama's speech on Monday and Speaker Boehner's speech yesterday, we can put the Democratic and Republican Party economic plans side by side. What is stunning is that neither side offers a serious diagnosis or a solution. The truth this time is not in the middle, a compromise of the two views. The truth, alas, requires a new view, and probably a new party.
The President's plan is another example of short-run gimmickry. The President wants to cut taxes in 2012 and raise them afterwards. The idea is to give a quick jolt to the economy, on the theory that the economy mainly requires a temporary stimulus to get it back on track. This is the same stimulus approach that has been tried since 2009. We have a learned the obvious: a series of short-term gimmicks does not add up to a long-term strategy.
The Republicans want a long-term strategy, but one that would take us in the wrong direction. The Republican mantra, repeated relentlessly since 1980, is that tax cuts and deregulation are the solution to growth and employment.
The Republican tax theory is simple: higher taxes reduce economic growth and job creation. Since government spending must be paid for with taxes, either now or in the future, cutting government spending is necessary for tax cuts and job creation.
The problem with the Republican position is simple: it's wrong. Government spending helps with job creation (and higher incomes) if the spending raises the productivity of workers. An economy without a public education system might have jobs, but they will be jobs digging ditches. An economy without a national science foundation might have jobs, but jobs at low wages selling the products of Chinese high-tech companies. An economy without interstate highways may have jobs, but they will be sweeping floors at a local restaurant rather than selling products to world markets.
Continued:
http://www.huffingtonpost.com/jeffrey-sachs/two-parties-no-solutions_b_966637.html
With President Obama's speech on Monday and Speaker Boehner's speech yesterday, we can put the Democratic and Republican Party economic plans side by side. What is stunning is that neither side offers a serious diagnosis or a solution. The truth this time is not in the middle, a compromise of the two views. The truth, alas, requires a new view, and probably a new party.
The President's plan is another example of short-run gimmickry. The President wants to cut taxes in 2012 and raise them afterwards. The idea is to give a quick jolt to the economy, on the theory that the economy mainly requires a temporary stimulus to get it back on track. This is the same stimulus approach that has been tried since 2009. We have a learned the obvious: a series of short-term gimmicks does not add up to a long-term strategy.
The Republicans want a long-term strategy, but one that would take us in the wrong direction. The Republican mantra, repeated relentlessly since 1980, is that tax cuts and deregulation are the solution to growth and employment.
The Republican tax theory is simple: higher taxes reduce economic growth and job creation. Since government spending must be paid for with taxes, either now or in the future, cutting government spending is necessary for tax cuts and job creation.
The problem with the Republican position is simple: it's wrong. Government spending helps with job creation (and higher incomes) if the spending raises the productivity of workers. An economy without a public education system might have jobs, but they will be jobs digging ditches. An economy without a national science foundation might have jobs, but jobs at low wages selling the products of Chinese high-tech companies. An economy without interstate highways may have jobs, but they will be sweeping floors at a local restaurant rather than selling products to world markets.
Continued:
http://www.huffingtonpost.com/jeffrey-sachs/two-parties-no-solutions_b_966637.html
