Thursday, September 23, 2010

Republicans' "Pledge to America" looks like a lot of spending cuts and vague proposals

So the Republicans released their "Pledge to America" and the draft is available online at . Basically, here are the main points regarding the economy.

1. Stop job-killing tax hikes.
They don't identify which tax hikes, but presumably they mean extending the Bush tax cuts.

2. End the attack on free enterprise.
This is very vague. I don't know what attack on free enterprise they are referring to. Perhaps it means repealing Finreg and all regulations so that big business can generate and hoard more profits at workers' expense. Maybe do away with minimum wage??

3. Roll back spending to pre-bailout, pre-stimulus levels.
This would drop the amount of expenditure by over $1 trillion annually or another way to say it, reduce GDP by 7%!. That would put growth at best around -5.5%. With the multiplier effect it would probably be more like -15%. That's a full blown depression. This is how they intend to create jobs?

4. Hold weekly votes on spending cuts.
As you can see, they're very serious about cutting spending. They will cut something from the budget pretty much every week.

5. Enact strict budget caps.
Yes and enact a balanced budget amendment as well, which would ensure mass poverty for generations to come.

6. Net freeze on gov't hiring.
Given that the vast majority of new jobs created this year were in the gov't sector, this means monthly payrolls will fall steeply into the negative. How do you think the market will take this?

7. End gov't control of Fannie Mae
We tried this already--privatizing Fannie and Freddie and it led to the housing market collapse. So do they really want to bring this idea back to "save" the Federal Government $30 bln annually after it has already cost us trillions???

8. Repeal health care.
Might not be a bad idea, but what do they replace it with? The old system, where 30 million people had no health care and insurance companies rationed as they pleased?

Some of their favorite sound bites that have no basis in reality:

"Federal Spending is 'crowding out' the private economy."

Where, exactly, is this crowing out? We are suffering from historic overcapacity in everything from housing, to plant and equipment to workers. And interest rates are at record lows. There simply is no crowding out.

"We cannot spend our way to prosperity."

Every successful businessman knows that you have to spend money to make money. They're supposed to be the party of business, but they don't understand that??


Ryan Harris said...

The beauty of these proposals lies in the likelihood that the tax cuts would be popular enough to pass and the spending cuts wouldn't pass. Net we could wind up with a bigger deficit. But frightening prospect if they succeed wholly.

Tom Hickey said...

Good comments, Mike, but I would add to this one (mine in caps):

5. Enact strict budget caps.
Yes and enact a balanced budget amendment as well, which would ensure mass poverty for generations to come. AND ENSURE DEBT PEONAGE FOR THE MIDDLE CLASS.

mike norman said...


Yes, that would be exactly like Reagan: a double dose of cuts and higher spending!

bubbleRefuge said...

From what I've seen on TV. It looks like the document was drafted by a big time republican lobbyist. MSNBC was reporting the guy lobbied for XOM and AIG.