On stimuli

The Republicans in Congress have issued a list of stimulus package line items they consider wasteful . Looking at the list, it’s pretty easy to deduce how Republicans see the world: anything related to energy efficiency, pollution reduction, government infrastructure or public health is "wasteful".

Oh, sure, there are a few stupid items. $246m for Hollywood to buy film with is a waste of money; there are already more crappy Hollywood movies being released than anyone wants to go watch, and film is a dying technology anyway. Better would be to spend $246m on grants for independent movies and tax breaks for digital upgrades to cameras and movie theaters.

Then there’s $2b for clean coal. If you think it won’t work, it’s a dangerous distraction. If you think it will work, it’s a great idea–but still fantastically expensive and unlikely to produce energy at affordable prices. So yeah, that’s a bit of a waste of money.

I suppose you could argue that reducing substance abuse amongst Native Americans will harm the already-suffering alcohol, tobacco and illegal drug industries, but I’m going to give the Republicans the benefit of the doubt and assume that’s not the actual point they’re making. Similarly, floods are good for the GDP, but I doubt that’s the reason why spending money on flood reduction projects is being described as wasteful.

But overall, considering that the purpose of a Keynsian stimulus package is to spend government money on buying stuff and employing people, most of these items fit the bill. Several also help shore up and improve vital infrastructure.

So what would a non-wasteful stimulus bill look like, according to the Republican party? Go on, take a guess. I think maybe you can predict the answer.

It’s H.R. 470, the "Economic Recovery and Middle-Class Tax Relief Act of 2009". And if you take a look you’ll see that it’s one or two trillion dollars of tax cuts, plus a token 1% spending cut on discretionary government spending. It includes a couple of the usual hobby horses: repealing the AMT and cutting capital gains taxes, both utterly irrelevant to the current situation. (If there’s anyone out there who has capital gains this year and is worrying about AMT, I’d like to know who his fund manager is.)

We had eight years of tax cuts. They failed to prevent the crash. The Republican response seems to be "Tax cuts didn’t work? Well, it’s because we didn’t cut them enough! More tax cuts!" Still, looking at their speeches about the evils of the Obama stimulus plan, it’s nice to see them belatedly taking an interest in the budget deficit, considering they were the ones who ran it up to the highest level in recorded history.