6 Republican Economic Myths Obama and Dems Must Stop Repeating
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President Obama pulled off a surprisingly strong reelection victory on Nov. 6—holding Romney to a remarkably appropriate 47 percent – by standing up for fairer taxation and a set of programs to assist the vast majority of Americans.
But prior to Obama switching into campaign mode, the president and leading Democrats adopted the Republican framing of issues again and again, and thus made the task of sustaining the economic recovery and spreading its benefits much more difficult. The counter-factual Republican positions were shored up, while the Democratic base was often left disoriented and demoralized as their leaders echoed the talking points of the Republicans and the CEOs.
Let me put it more bluntly: without exaggerating, the president and Democratic spokesmen at times literally repeated key Republicans lies about the seriousness of the federal deficit, the steps necessary for a full economic recovery, taxes and jobs, and how to bring broadly shared prosperity back to an America increasingly split by Third World-level inequality.
Let’s examine some of the most important Republican lies, look at how the Democrats repeated them and explore the reality that America faces.
1. Spending Cuts Spur Growth
The Republicans have repeatedly argued that the federal government's strategy in a recession should be no different than that of a family strapped for cash: avoiding any unnecessary outlays (except for tax cuts for the richest 2 percent) and getting out of debt as rapidly as possible. The successful Keynesian strategy of public spending to stimulate the private economy-- employed by FDR to relieve the Great Depression -- is a gigantic historical truth that is denied by House Budget Chair Paul Ryan (R-Wis.) and his like-minded colleagues.
Instead, the Republicans have fallen back upon a simplistic and false formula of "spend less, owe less, grow more.” Rep. Jeb Hensarling, R-Texas outlined the prevailing GOP attitude when he claimed that, “Deficit reduction is part of job creation.” In short, cutting stimulative government spending and reducing public employment somehow contributes to economic growth despite the resultant weakening of already feeble consumer demand.
But if the Republicans’ all-season, all-purpose economic strategy of tax cuts and their denial of Keynesian historic successes remain mystifying to outsiders, equally strange has been many Democrats’ eagerness to repeat the Republican lie that cuts in government spending somehow lead to economic health. This myth has been propped up by numerous Democrats and helps to shift the current “fiscal-cliff” budget to the Republicans’ advantage.
One of the worst moments occurred during President Obama’s 2010 State of the Union address, when he promoted a ludicrously false analogy between families’ budgets and the federal government's. Obama’s statement was perilously close to a direct re-statement of the Republicans denial of reality.
“Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs,” the president declared.
With statements like these, Obama and the Democrats contributed mightily to making the task of winning adequate stimulus measures much more difficult. As New York Times columnist Nicholas Kristof observed in 2010, “For all their flaws, Congressional Republicans have been stunningly successful in framing the national debate. Instead of discussing a jobs program to deal with the worst downturn in 70 years, we’re debating spending cuts.”
2. Only Private-Sector Job Growth Matters
The Republicans have incessantly portrayed government employment as a counterproductive drain on the private economy, siphoning away tax dollars, consumer spending power and entrepreneurial vigor from the private sector and the real economy. The notion that the private sector could function entirely without public sector workers to plow the roads, maintain the highways, protect the public health, assure public safety through police and fire protection, and educate future workers lies just beneath the surface of remarks by leading Republican figures.