Thursday, February 12, 2009

On Wasteful Spending, AKA Stimulus

Jon Chait largely has the defense of wasteful spending right in The New Republic today. He does an excellent job of refuting right-wing claims that this is just "wasteful" spending:

Congressional Republicans have continued to churn out lists of "wasteful" spending in the stimulus bill, highlighting such outrages as funding for Amtrak, making federal buildings more energy-efficient, flood-reduction projects on the Mississippi River, and the like. They have assailed the bill as a "wish list." Well, yes. If you suddenly had to spend $10,000, would you spend it on things you'd always wanted, or would you spend it on something you'd never even considered before?

The mass ignorance on display was best exemplified by the contretemps over a provision to help undergird hemorrhaging state budgets. Most states are required to balance their budgets annually. During downturns, their revenue collapses and their costs (on things like Medicaid) rise. This forces the states to raise taxes and cut spending, the exact opposite of what you want in a recession.
This is why you've seen Republican governors like Florida's Charlie Crist are in favor of the stimulus bill. They have to balance their state budgets and need help from the federal government. In Crist's case, he's hoping to avoid increasing taxes, the ultimate Republican holy grail.

And it's important to keep in mind that many of the "wish list" items that Republicans are blaming Democrats for are things that, in most cases, will create jobs in construction and technology or even decrease costs. Republicans did a good job of arguing that putting family planning in the stimulus bill (mostly a corrective bureaucratic measure that would eliminate wasteful paperwork) was something that would ultimately save money in the long run. That means that much of the protests against the stimulus are just ideological chatter.

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