Jan 20, 2010

Daniel Gross Cries Like A Baby

Daniel Gross, noted history major who claims to be an economist, has joined the chorus of Democrats trying to wrap their heads around Scott Brown's election. As per usual, Gross then resorts to partisan snipes without regard to empirical evidence.

Republicans are soooo inconsistent, he says, because they (a) want to lower the deficit, (b) want to lower taxes, and (c) don't support Obamacare and didn't support the stimulus. Now, he does note the obvious Republican political ploy going on: pointing out Obamacare's $500 billion in Medicare cuts. But who can blame them? Democrats got a political plus for pointing out over and over again how Republicans were spendthrifts when they were in power; but then Democrats spent even more than Republicans in their first year controlling the legislature and the presidency. Politics is politics, and Democrats have a weakness that Republicans are gleefully noting.

The rest of his argument is crap, though.

(b) may seem to fly in (a)'s face. It's true; income tax cuts result in short-term budget drops. However, the point economic libertarians continue to make is that by having more of their own money to invest, people will cause the economy to grow in the long term, resulting in higher tax revenues down the line. It also is more just in general, since people have a right to the fruits of their own labor. Gross (intentionally?) fails to mention the other prong to deficit reduction: spending cuts. It's true that they won't do it by themselves (discretionary spending this year is expected to be $1.368 trillion, while the deficit is estimated at $1.17 trillion); you can't cut all discretionary spending. That's not to say you can't cut any or a lot. Anyway, to act like raising taxes is the only way to cut the deficit is just wrong.

(c) is completely idiotic on Gross's part. The stimulus was a political boondoggle. Sure, a fiscal stimulus may have been necessary (though over 200 economists sent a letter to President Obama saying it wasn't). However, the way it was crafted meant that not even a third of the funds have been distributed yet--almost a year after its inception. That's not so much a flash-in-the-pan as a long-term discretionary spending spree. There's no actual way health care costs will go down with the bill that's been proposed--only a budget gimmick (counting the bill's 'first decade costs' as the first five years--when no services will be rendered--and the next five, as opposed to the first ten years after services begin)--makes it look almost neutral.

But, that's enough for tonight. I can only say that when Daniel Gross starts to whine through his column, things must be right in the world.