TW: I must say Mike Pence of Indiana may be one of my least favorite Congressmen. The guy is rabidly conservative on social issues and just whacked on economics. He is apparently leading an emerging effort by the Republicans to give Hooverism another shot at ameliorating a depressed economy.
In 1929-1930 the Republicans led by Herbert Hoover reacted to the collapse of financial markets and the contraction of demand by reducing government spending. For the subsequent 75+ years this policy was regarded as an exceedingly stupid policy in the face of demand contraction. The logic being when an economy is contracting (e.g. reduced employment, deflation etc.), the spender of last resort reducing its spending is the precisely wrong policy.
Certain Republicans of the Pence, Tom Delay, Bob Jindal, John Boehner ilk have now decided that the Hooverites were in fact correct.
There are legitimate gripes with some of the details of the Obama plan but this Hooverite dogma is not quibbling on details it is dangerously economically ignorant and potentially destructive. There will be a time to address the federal debt accumulated fighting in Iraq, providing wealthy with tax breaks and yes fighting this depression but you do not contract government spending amidst a massive demand contraction.
These folks have a playbook (of dubious validity ever) from the 80's and 90's and will just not adapt to the fact that we are in different circumstances.
From Washington Independent:
"they [Republicans] have proposed a “spending freeze,” a controversial idea among economists during an economic downturn..."We’re advocating that Congress freeze all federal spending immediately,” said Rep. Mike Pence (R-Ind.), the chairman of the House Republican Conference, during a Tuesday luncheon at the conservative Heritage Foundation. “People out there are hurting, and they understand what you do when times are tough...Pence’s argument for a spending freeze is widely accepted within the Republican conference.
...Bruce Bartlett, a conservative economist who wrote a book critical of George W. Bush’s spending, could not name many peers who believe that smaller deficits and less spending are the way to combat economic downturns. “It’s a total double-standard,” said Bartlett. “Republicans deficits stimulate, Democratic deficits don’t.”
...As Republicans push for spending cuts or spending freezes, they continue to propose tax cuts. That unsettles even some economists who agree with the thrust of Republicans’ arguments. “I would probably not support supply-side tax cuts right now,” said Lee Ohanian, an economics professor at the University of California-Los Angeles"
http://washingtonindependent.com/31396/gop-turns-to-talk-of-spending-freeze
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