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Friday, December 09, 2011

GOP Flateartherism Strikes Again

At this point, I have to ask, what do Republicans have against demand? I get that they like this pie-in-the-sky supply-side stuff, but it's "supply and demand," not "supply or demand." At every turn, Republican economic policies have consumers reducing spending, as if a stagnant economy and slow to non-existent growth is the best thing ever.

Case in point:

The Hill:

GOP leaders hope to build momentum for an end-of-year tax package with sweeping reforms to federal unemployment benefits.

The Republican proposal is expected to reduce the total number of weeks unemployed workers are eligible for aid by as much as 40 weeks and tighten rules for eligibility.

Such a reduction would significantly reduce the cost of extending federal unemployment benefits, making it easier to secure GOP support for a measure that will also include an extension of a payroll tax cut many conservative Republicans dislike.


Can I just go ahead and say that this is stupid beyond words? Employment benefits are an economic stimulus that not only kicks in automatically, but automatically ramps up when the economy is bad and dials back when the economy improves. I don't know what it is about "the economy is people spending money" that Republicans don't get. Unemployed people spend money. Why? Because they have to. As much as the GOP likes to pretend that unemployment benefits are a lavish free ride, they represent as significant reduction in income. People collecting benefits aren't wasting that money on frivolous stuff, they're trying to figure out how to get it to cover their expenses. As a result, they spend all of it.

And with long-term unemployment a major problem, Republicans want to reduce the number of weeks a person can collect benefits? Are you kidding me? As I said before, this is stupid beyond words. What Republicans are proposing is crippling the economy in one place to pay for fixing it in another -- i.e., a sort of shifting status quo, where the problems of one sector are sloughed off on another, resulting in no net improvement. Want a payroll tax cut extension to boost consumer spending? Fine, then we have to cut unemployment benefits and reduce consumer spending there.

It's like they don't even understand the basic problem at all. The Republican War on Math marches forward.

Of course, the GOP had earlier defeated a measure that would've set up a "millionaires surtax" to pay for the extension. But we've got to protect the wealthy, because they're saving and not spending. Yeah, it doesn't make any damned sense, but really, do you even expect it to at this point?

And how do millionaires feel about the surtax?

National Public Radio:

[W]e put a query on Facebook. And several business owners who said they would be affected by the "millionaires surtax" responded.

"It's not in the top 20 things that we think about when we're making a business hire," said Ian Yankwitt, who owns Tortoise Investment Management.


He says his ultimate marginal tax rate "didn't even make it on the agenda."

And that was the consensus; a surtax wouldn't make any difference to the respondents.

See -- and I know this is hard for Republicans to get their heads around -- people go into business to make money. And here's the tricky part; if no one's spending money, they don't make money. You can give them the biggest tax cut in the world, but if their income is down, they'll make less money. It's weird, I know. But that's math for you. It just hates GOP economics.

Worse, people don't hire people just for the hell of it and because they can afford it. They hire people because they need them. No tax cut is going to make someone need an employee -- consumer demand will. And the reverse is true; if they can't afford a worker anymore, they'll lay them off. Why wouldn't they be able to afford to keep the job open? I don't know, maybe because some boneheaded Republicans cut unemployment benefits and now a whole bunch of people aren't spending money anymore. Things like that. As I said, math hates Republicans.

The Earth is not flat and the laws of supply and demand have not been repealed. I know that may be hard for Republicans to accept, but that's just the way things are.


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