Republican Theory of Our Current Economic Woes

originally from the Wall Street Journal...

http://www.tnr.com/blog/jonathan-chait/92143/the-republican-theory-our-current-economic-woes

According to both Republican politicians and conservative opinion-writers, the problem with our economy is not a shortfall of demand...

...Problem being, as Jon has pointed out before, everyone from Ben Bernanke to Goldman Sachs thinks that large, immediate cuts would retard growth. Even all the conservative folks on the Bipartisan Policy Center debt reduction task force signed on to a plan that includes a one year payroll tax holiday. And now, the Wall Street Journal has a story, the lede of which is, “The main reason U.S. companies are reluctant to step up hiring is scant demand, rather than uncertainty over government policies, according to a majority of economists in a new Wall Street Journal survey.” The Journal notes, “31 cited lack of demand (65%) and 14 (27%) cited uncertainty about government policy.”

It’s not just economists, either, who are largely concerned with demand: In a survey conducted in June by the National Federation of Independent Business, the plurality response from small businesses about their “biggest problem” was “poor sales,” which beat out both taxes and “government regulations and red tape.” The Journal points out that this percentage is “above highs seen in the recessions of the 1990s and early 2000s.”

...reducing spending in the tax code would not have a supply-side effect. There is, however, the possibility that getting rid of tax expenditures “would reduce disposable income, therefore aggregate demand, and therefore the size of the economy...”

to everything, the Conservatives floor me on this one.

We have millions of people not working. This means
they are on unemployment which is taking money from
the treasury. They are therefore in "survival mode".
and in no position to be out buying things. Whether
the Republicans on the Hill can fathom this or not,
this is what creates anxiety. Business men and
women know their customers have been fired and do
not have the means to be frequenting their business
establishments. Business people can count.

It seems some Republicans learned some theory and
they have memorized it. What they have learned
is GOSPEL--almost biblical. They come across as
so rigid in their tax cuts produce jobs. They never
learned there circumstances which alter this and
therefore to blindly cling to and insist on tax
cuts, for example, can be stupid. They are back
on Deregulaion. Spending cuts are the only thing
we can do to take care of the cris. They are not
willing to consider the timing may be off.

This makes them appear not ready for governing.

With the economy so fragile, spending cuts means
more layoffs. More people without jobs when
our biggest problem right now is lack of jobs.
The Governors have been laying off right and
left trying to get their budgets under control.
All those layoffs in the state have stalled the
economy right now. More people laid off means
LESS PEOPLE GOING TO BUSINESSES to make purchases
etc. Less people going to the stores scares
Business and they cut back so as not to get caught
in a compromised position. Now DC REPUBLICANS
want more layoffs on top the states.

I recognize there has to be changes in Budget
and Financials of our Government. I am saying
it has to be done at the correct time to avoid
further damage. The Republicans scare me to
death. I get the feeling we have a bunch who
understand very little about economics and
could care less. You cannot run the Government
like balancing the family checkbook. Nor can
you run the Government like a business. Can
there be more efficiencies established. Yes
with sensible reform. TIMING is everything.

and one that includes realities about economics... I think it is very telling that this came from the Wall Street Journal... that businesses aren't hiring because there is no demand..

you are spot on... the more money we take away from less wealthy people the less demand there will be... very simple

The Republicans are extremely disingenuous when they continue their meme "job-creators"... damn, I hate that so many people are too ignorant to see what is happening. Supply side economics does not work in this kind of economic climate.

we need a serious do-over here... we have backed ourselves into a corner on so many fronts... economy, environment, wars(international relations), etc...

following their prescriptions will take us down the road to ruin.