10 Absurd Conservative Myths About Obama's Recovery Plan

By Sara Robinson, Campaign for America's Future. Posted January 9, 2009.

Some of this money will also be aimed at covering state budget deficits. That money will also be spent immediately on things like health care, child-care programs and other underfunded state services that employ large numbers of people.

That's a lot of direct funding that will put people to work quickly -- quite likely, faster than giving people tax cuts and letting them trickle out through the economy.

8. It’s wrong to bail out spend-thrift states. Let them stimulate their own damned economies.

Please. Haven't we all had a lifetime bellyfull of tax revolutionaries and drown-the-government-in-the-bathtub crazies? I swear...can't live with 'em, can't just shoot 'em....

States aren't in trouble because they overspent their allowances. Almost every state constitution in the country requires that the government balance its budget every single year. You want fiscal sanity? Anybody who's put in their time in state government knows all about it. They've made the hard choices, and faced the consequences, too.

The problem is that the recession has undercut state tax revenues to the point where these governments can no longer afford to cover their obligations -- some of which (like bonds) were taken on years ago, when times were better. Commitments that were fiscally prudent by any measure back then are wiping them out now. Budgets that were balanced and sound when they were first outlined a couple years ago are impossible monsters today.

And, unlike the federal government, the states can't deficit spend their way out of it. That's why they need federal help.

9. This whole Keynesian thing has been totally disproved. It didn’t work during the Depression. It didn’t work for Japan in the 1980s.

Say what? We know that rewriting history is a favorite conservative pastime. America is Christian country. Slavery was good for black people. Bush was never a real conservative. Saddam was in cahoots with al-Qaida. And on it goes.

The campaign to discredit Keynes (which is directly traceable to the Heritage Foundation) is a new and rather audacious fiction -- one that leaves both progressive and conservative economists as gobsmacked and sputtering as scientists get when you bring up "intelligent design." And the factual basis for it is, if anything, even more specious.

Paul Krugman addresses both the Depression and the example of Japan in his new book, "The Return of Depression Economics." According to his telling of the tale, in both cases the affected economies strengthened as long as the government continued to infuse capital into them; but bobbled when there was enough improvement that the budget hawks could get some political traction. When the spending flagged, so did the recovery. In Japan, bold steps alternating with repeated failures of nerve created a liquidity trap that stagnated the country's economy through most of the 1990s.

Keynes' prescription has worked everywhere it's been tried -- as long as governments acted boldly and quickly enough. It's not medicine that works if you take it in half-doses, or quit before the course of treatment is finished. In fact, doing it with less than full commitment can actually make the situation worse.

10. This is a partisan program that's designed to promote the Democratic agenda.

No. Almost every businessperson in America -- including the conservative ones -- are stepping forward in support of the stimulus package. The U.S. Chamber of Commerce is on board with it. So (unsurprisingly) are most of the building trades and engineering groups who stand to prosper with a new round of infrastructure spending. The current economy is hurting everyone, regardless of political affiliation -- and most Americans agree that it's time for the government to step in and get things going again.

And Yes. I've written before about the way this kind of investment in the health and well-being of the middle class can, in the end, transform long-held conservative beliefs about how the economy should work. A stimulus package that works will prove that government can do important things that no other entity can do; that it can effectively in the public interest; and that there's actually such a thing as a national common good that deserves to be protected. In short, it will reaffirm progressive values in a way that's irrefutable, and will earn the enduring respect of the country.

Bernie Horn and the Institute for America's Future research staff contributed extensively to this post. For other sources, follow the links provided.

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Sara Robinson is a twenty-year veteran of Silicon Valley, and is launching a second career as a strategic foresight analyst. When she's not studying change theories and reactionary movements, you can find her singing the alto part over at Orcinus. She lives in Vancouver, BC with her husband and two teenagers.

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