Tuesday, November 30, 2010

Damned if you do, damned if you don't

After successfully rescuing the economy from tumbling off a cliff into another Great Depression and overseeing ten straight months of private sector job growth equaling more jobs gained than in the entire eight years under George W. Bush, President Obama and Congressional Democrats still can't get any respect. The Right, Republicans and Tea Partiers, are all too happy to blame the President and his allies for their part in the Stimulus plans and 'bailouts' of the auto industry, banks, and Wall Street even if in the end they saved jobs, made profits, and boosted spending.

Even though government efforts like the Stimulus saved and created 1.4 to 3.6 million jobs last quarter, the Gross Domestic Product increased 1.7 percent, and the economy grew by an annual 2.5 percent according to the Congressional Budget Office; even though consumer spending grew 2.8 percent last quarter, the most in nearly four years, the Right will be quick to point out that 'spending money to make money' with the Stimulus and TARP raised our deficit. And even though the pace of job loss has slowed considerably over the last two years and unemployment rates have fallen in 23 states this last month, the Right will be just as quick to point out the national unemployment rate remains arguably high above 9 percent.

The state of the economy is improving under President Obama, but it's just not improving quickly enough for some and the efforts to improve it are constantly criticized by the Right. Despite positive growth in private sector jobs and the GDP, the Right continues to denounce the Bush and Obama TARP and the Stimulus Acts meant to revive the economy as spending bills that 'tax our children and grandchildren' apparently believing it would have been better for their children and grandchildren to be in a Great Depression. The Right contrarily rails against government loans to banks, auto makers, and Wall Street calling them 'bailouts' at the same time rails against government intervention in business in the form of regulation at the same time demands government accountability for job creation.

A rough economy and high unemployment always spells doom for the party in power. Two years of a Democratic President during tough times, even if things are steadily improving, means the Republicans will benefit from a beleaguered nation. Therein lies the rub. It's actually in the Republicans best interest to see the economy, and the nation, suffer.

The outsourcing of American jobs to other countries is damaging our economy yet Senate Republicans, along with a few Democrats including Connecticut's Lieberman and Virginia's Warner, voted to block a bill that would end tax incentives for companies to ship jobs overseas. Tax breaks, regarded by Republicans to be the best way to stimulate economic growth, was voted down by Republicans in the Senate when Democrats proposed a bill that would grant tax breaks and free up lending to small businesses.  Consumer spending on household goods accounts for roughly two-thirds of our economy and unemployment benefits puts money in the hands of people who will spend it, yet House Republicans blocked the extension of unemployment benefits.

Instead of backing any Democratic effort to boost the economy, even if they have done so in the past, Republicans are focused on one plan: the extension of the Bush tax cuts for the wealthy. While President Obama and Democrats support extending middle class tax cuts to individuals making less than $200,000 ($250,000 for joint filers), Republicans want all the Bush tax cuts extended including those to the wealthiest 3 percent of Americans who without the tax cut would only see their taxes go up at most, 4.6 percent. Although the Right raises objections to increasing the deficit with Stimulus plans, government loans, and unemployment benefit extensions, they are fired up to add $700 billion more in debt to finance tax cuts for the rich that have proved disastrous to our economy in the decade since President Bush enacted them.

Favoring the Bush tax cuts over the extension of unemployment benefits makes no economic sense even to John McCain's former economic adviser, Mark Zandi, chief economist for Moody's Analytics. According to Zandi's testimony before the Senate Finance Committee for every dollar spent on making the Bush tax cuts permanent there is an $.32  increase in the GDP whereas for every dollar spent to extend unemployment benefits there is an $1.61 increase in the GDP. In other words, according to Zandi, a dollar spent on unemployment compensation gets five times more "Bang for the Buck" to the GDP than a tax cut for the rich.
Republicans and Tea Party Republicans who ran in this year's elections on the slogan: 'it's the economy, stupid,' now find themselves having to state their positions on the economy in ways that often sound confusing, contradictory, and plain stupid.

In spite of positive growth in the economy, the strange backlash against the policies responsible for that growth, put in place by the President and the Congressional Democrats, favored the Right in the elections. If the dominant thought in the minds of voters was, 'where are the jobs?' then the thought in the minds of President Obama and Democrats must have been, 'damned if you do, damned if you don't' and Republicans are happy to have it both ways.

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