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Why the GOP will never cut spending

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August 25, 2010 – Comments (25)

Listen very carefully to what the Palin/Gingrich/McCain wing of the Republican Party say about the economy.  They consistently argue against what they see as frivolous spending.  It's not the massive spending itself that is the problem - it's the way the money is spent.

This is a very important distinction for libertarian minded conservatives to keep in mind as the elections near. 

So here's the question: Why do these conservative politicians make a distinction between the kind of spending and not the amount of spending?

My theory:

If these Republicans admitted that cutting spending, in general, would lead to a quicker economic recovery, they would have to face the reality that cutting military spending would be just as beneficial to our economy as cutting the pork that was passed under the guise of stimulus.  

In fact, this hypocrisy would be even more blatant once a libertarian minded conservative (which I am not, but I like their company), considered how vastly better off our economy would be today had these same conservatives not supported the endless Middle East wars.  

Palin/Gingrich/McCain/Beck/Limbaugh/etc.. can not argue for a total cut in spending without admitting culpability in the current economic state of America. 

I open this to your thoughts, whether you agree of disagree.

David in Qatar

25 Comments – Post Your Own

#1) On August 25, 2010 at 4:43 AM, SuperPicks (29.10) wrote:

When can I vote for you?

...and dont ever stop posting

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#2) On August 25, 2010 at 4:54 AM, guiron (20.11) wrote:

Although there is disagreement on even the definition of deflation or inflation, one measure is the velocity of money. A major problem in a deflationary market is the slower velocity of money. Although they money we spend in the military isn't necessarily productive, it is spending. Removing that spending further slows the velocity. One major problem I see with purely ideological political types such as libertarians is that they put their ideology over practical considerations. Even though cutting spending could cause further damage to the economy, govt. spending = bad, so cutting spending must be better for the economy, regardless of the facts to the contrary. Even if you accept the argument at face value, what are all those military contractors and soldiers going to do for a living once you put them out of work? Who is hiring right now? Are you really going to put tens of millions of people out of work and call it good medicine for the country? Do you know how many towns are entirely dependent on their military base? Good luck getting elected on that platform. Vote for me, and I'll put you and your city out of work!

A one-size-fits-all answer to every problem sure sounds appealing on the surface, but it's incredibly foolish to subscribe to anything like that as far as policy (and it makes even less sense if you're one of the many people whose lives are ruined by it). Which the Republicans never have anyway. It's just a way to get things riled up for an election.

Which is really the problem. There is no practical solution which says we cut all our spending or we print money until the sun doesn't shine anymore, but there aren't many people who claim to be "mad as hell" about the way the country is going who are honestly interested in getting things done. Most of them are interested in making headlines and helping themselves. I'd believe it more if the "opposition" weren't so completely cynical- Tea Party, GOP, whatever. I've never seen anything like it. It's like they don't even care if people know they're lying anymore, as long as enough people buy it to get them where they need to go.

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#3) On August 25, 2010 at 5:05 AM, whereaminow (22.15) wrote:

SuperPicks,

=D You vote for me every time you engage in voluntary exchange. 

guiron,

Even if you accept the argument at face value, what are all those military contractors and soldiers going to do for a living once you put them out of work?

The same argument could have been made after WWII.  Yet unemployment fell, combined with a 75-80% reduction in government spending after the war.  And the economy grew significantly in the late 40's into the 1950's.

(In fact, the argument WAS made by mainstream economists - mostly Keynesian - and AS USUAL they were totally baffled that the economy recovered.)

Perhaps a reading of economic history will sort out the many questions you have.  But first, you will have to stop accusing everyone whom you disagree with as being blinded by ideology.  It's not getting you anywhere.

David in Qatar

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#4) On August 25, 2010 at 5:40 AM, dbjella (< 20) wrote:

David -

For the first time in my life I will be voting for someone who is not Republican or Democrat.  I believe in fiscal conservatism, but have not seen either party practice it since I have been alive.  I probably believe people need a little more gov't then you do :) but I think almost all of us can agree that the current size of American Gov't at all levels is to big in size.  Unfortunately, a democratic republic (whatever is called) does not lend itself to limited gov't over time :(  

All - 

For those that argue that deficits and resulting debt doesn't really matter for countries that control their currency, why do we need to pay taxes?  Let us end this charade and have the Fed fund the Treasury.  

If you are of the mindset that debt and deficits do matter a little, then what is your acceptable deficit and debt level?  IMHO, I think at these levels we are setting up our children for a whole lot of pain. 

Thanks for letting me ramble.  I hope you and your gal are well. 

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#5) On August 25, 2010 at 5:50 AM, whereaminow (22.15) wrote:

dbjella,

Thanks for letting me ramble.  I hope you and your gal are well.

Thanks to you! 

And thanks for your ramblings.  I am sure many fiscal conservatives feel the same frustration as you.

David in Qatar

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#6) On August 25, 2010 at 7:47 AM, Gemini846 (60.91) wrote:

I tried to explain my election choices (our primary was yesterday) to my dad who just kept saying "He's a nice guy".

Yes, I understand the 20 year career politician is a nice guy. Heck I think Obama is a "nice guy". I think a "nice guy" is the kind of person I want to sit down with and have a burger, not someone I want in office during a time of crisis.

I've heard the following: Democrats used to be for the working man, now they are for those who don't work. Republicans used to believe in cutting spending and Taxes, now they just cut Taxes.

Both parties are to blame.

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#7) On August 25, 2010 at 8:44 AM, Melaschasm (60.99) wrote:

David, I agree with you about many things, including the idea that the GOP is unlikely to cut total spending.  However, I disagree with much of this blog.

1.  The militay industrial complex is not the spending restraint problem.  US spending could be cut by almost 50% while still increasing spending on military, CIA, FBI, and related items.

2.  Rush has spent 20+ years calling for reductions in total federal spending.  Rush was actually one of Bush's biggest critics regarding domestic economics, and specifically the various new entitlements that Bush supported.  While there are many reasons to dislike Rush, he does support a reduction in total government spending.  Not as big a reduction as you support, but a significant reduction.

3.  McCain is only a conservative for 6 months out of every 6 years.  Specifically the 6 months prior to Arizona deciding if he should be elected.  The rest of the time McCain is the darling of the media as he attacks conservatives and is praised as a maveric by liberals.

4.  Gingrich did try to cut some spending, although he was always more about reform than cuts.  However, once he was kicked out of Congress for being to conservative on economic issues, he moved towards the left.  It has been many years since he could be considered 'conservative'.

5.  Palin's claim to fame is fighting corruption.  She did a decent job on spending in Alaska, but Palin is not experienced enough to draw specific conclusions.  If she had been left in Alaska to serve at least two full terms as governor before getting into national politics, we could do a better job evaluating her.

6.  Beck seems to be most popular with liberals who want to attack a 'conservative'.  Does Beck even have a large, loyal conservatives audience?

The reason the GOP is unlikely to cut spending is because the GOP leadership is not conservative.  They are moderate centrists.  This is one of the reasons why half of all republican voteres dislike their party.  There is an opportunity for the libertarian party to make significant gains, but doing so will be extremely hard since incumbents, both individual and party, have a big financial advantage.

 

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#8) On August 25, 2010 at 8:46 AM, russiangambit (29.30) wrote:

I think we need something like flat tax to flush the system. There is so much abuse of the tax code on both sides, and so many people are feeding at the trough ( lawayers,a ccountants, IRS) at our expense. With flat tax politicians will need to figure out how else to make themselves useful instead of just endlessly promising tax brakes to their chose consitutents. Flat tax should be something like 20% for everybody , except for those making less than 20K a year ( or somewhere around that number). I am fine with such people not payign tax at all, but they shouldn't be getting any tax credits either.

The answer to any sort of corruption and corrupting of the electorate is transparency. Obama got it right, and this is what he promised us. btu so far I've seen no more transparency from him than from Bush administration. very dissapointing. It just goes to show that the president these days is just figurehead, regardless of who he is he is already beholden to special (corrupt) interests by the time he/she gets to the White House.

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#9) On August 25, 2010 at 8:50 AM, russiangambit (29.30) wrote:

> The reason the GOP is unlikely to cut spending is because the GOP leadership is not conservative.  They are moderate centrists. 

I am centrist. They are nothing like me, they are wolfs in sheep clothing, They are power hungry and greedy politicians, all of them, no more no less.

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#10) On August 25, 2010 at 10:04 AM, whereaminow (22.15) wrote:

Melaschasm,

Thanks for reading and considering my thoughts.  This was merely a thought exercise, not a rigorous analysis.  Nonethless....

My point was that it is inconsistent for Republicans to call for a decrease in spending without a decrease in military spending.  The economy does not care where the money is going.  It only cares that money that could be put to productive use by private citizens is being taken away by the government.  It is nonsensical to say spending on a bridge to nowhere is bad for the economy, but spending on a war to nowhere does not affect the economy.

Finally, a Republican like Rush Limbaugh who supports endless war (at least he did in 2002), cannot claim to be a fiscal conservative.  War is the most damaging and expensive endeavor that a government can embark upon.  There is no such thing as a cheap war.  With war comes the growth of the State, as Randolph Bourne pointed out a century ago.

I guess my point, if I have one, is that just as money squandered on pork projects could have created jobs, so could have money squandered on this unbelievably corrupt war machine.  (And it is horribly, horribly corrupt - I beg everyone to take a closer look.)  Our economy would be in much better shape today without the wars.  (I also believe we would be safer, but that's an issue for another post.)

On pretty much everything else you wrote, I agree.

David in Qatar

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#11) On August 25, 2010 at 10:40 AM, leohaas (32.32) wrote:

Wow. I agree again with David.

Here is my thought on why this whole spending thing is baked in the system.

In the US, everyone in Congress represents either a state or a district within a state. And everyone in Congress wants to be reelected. The best way to convince your constituents that they should reelect you is by bringing home the bacon: getting Congress to spend in your state/district.

This is true regardless of party affiliation.

I currently live in NJ (still very much a blue state, even though we have a Governor with an R behind his name), where people constantly complain that "we only get 60 cents back from Washington for every dollar we send there." Never mind that is mostly because we have a relatively low number of welfare and medicaid recipients...

I currently work close to DC and listen to the local radio stations. Virginia (traditionally a red state, even though they did vote for Obama) is up in arms: the Secretary of Defense is planning to close the Joint Forces Command in Norfolk VA. Never mind that this might be a good idea for the nation as a whole, the folks in VA and their politicians only see the 5,000+ jobs that will disappear!

As long as we have a system where everyone in Congress represents a state or district, this madness will continue...

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#12) On August 25, 2010 at 11:06 AM, whereaminow (22.15) wrote:

leohaas,

Everything you say is true.  I can't do anything but nod in agreement.

David in Qatar

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#13) On August 25, 2010 at 11:16 AM, binve (< 20) wrote:

Excellent post David! I am in complete agreement

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#14) On August 25, 2010 at 11:30 AM, mtf00l (45.52) wrote:

Points in no specific order...

Politicians use to be public servants.  Now they are self serving.

Politicians use to be  accountable to their constituents. Now they are accountable to their fund sources.

(Example: By Aug. 4, 2010, McCain had spent $19.6 million to Hayworth's $2.6 million)

We went to war in Iraq before and put Saddam Husein in power there for our economic and strategic gain. 

We did a similar thing in Iran, remember the shaw.

The difference in the two scenarios above was that were done covertly with copious amounts of money. The latest two wars were done in the open because politicians now know they win no matter what.  If you vote them out they still get permanent retirement income greater than most citizens and lifetime healthcare and not the kind they voted for the citizenry.

Rant concluded. 

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#15) On August 25, 2010 at 11:46 AM, whereaminow (22.15) wrote:

binve,

Thanks!  Always appreciate it!

mtf00l,

Lots of agreeing going on around here!  (Must be something in the water today!)  Like leohaas above, I can't do anything but nod in agreement to everything you say.

russiangambit,

This is totally off topic, but I've been reading a lot of Marx lately Why would anyone do that, right? lol, well I wanted to do some deeper investigation, since it had been a long time since I read Das Kapital.   Anyway, I came across a number of inconsistencies and I was wondering if I did a blog on Marx, would you want to do some back-and-forth discussion on it?  Might be enligtening to some people.  Would be nice if zloj joined us.  Any interest?

David in Qatar

 

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#16) On August 25, 2010 at 12:02 PM, russiangambit (29.30) wrote:

> This is totally off topic, but I've been reading a lot of Marx lately Why would anyone do that, right? lol, well I wanted to do some deeper investigation, since it had been a long time since I read Das Kapital.   Anyway, I came across a number of inconsistencies and I was wondering if I did a blog on Marx, would you want to do some back-and-forth discussion on it?  Might be enligtening to some people.  Would be nice if zloj joined us.  Any interest?

Sure, no problem. I can always offer you the official Soviet interpretation -)). Though, I think if your ead Marx with open mind not knowing what came out of his work, there is a lot of good stuff there. 

 

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#17) On August 25, 2010 at 12:15 PM, whereaminow (22.15) wrote:

russiangambit,

Awesome!  I've put together a handful of questions that jump out at me.  I thought I'd start a blog by throwing one out.  Let you and zloj give me your thoughts.  Have a little back and forth, and then I'd throw out the next one.  I think it could be fun.

I will give you a heads up, and hopefully get zloj on board, on when I plan to post.  (Probably in a week)

David in Qatar

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#18) On August 25, 2010 at 12:19 PM, TMFHousel (93.31) wrote:

I'll only add one of my favorite quotes: "Governments who rob Peter to pay Paul can always rely on the support of Paul." 

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#19) On August 25, 2010 at 12:31 PM, dargus (89.77) wrote:

mtf00l

I'm a bit doubtful of your rosy nostalgia about politics past. I'm pretty sure politicians have always considered keeping their job to be a pretty high priority. Accountability to constituents only means you need to make them think you are doing what they want. More money and PAC's makes it worse, but my impression is things are the same as they ever were.

 

 

 

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#20) On August 25, 2010 at 5:32 PM, vriguy (75.02) wrote:

The solution is to do away with elections.  Randomly choose 500 (or a large enough number to be representative) citizens to serve a single 4 year term and take decisions they believe are in the best interests of the country or state or city.  That would be a truly representative democracy.  And to those that argue that ordinary people cannot be trusted with these complex issues, I respond the professional politicians have demonstrated their fecklessness and incompetence - amateurs could not do worse and would likely do much better.

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#21) On August 26, 2010 at 1:00 PM, leohaas (32.32) wrote:

"The solution is to do away with elections.  Randomly choose 500 (or a large enough number to be representative) citizens to serve a single 4 year term and take decisions they believe are in the best interests of the country or state or city."

Because that works so well in our judicial system? Look at the verdicts juries come up with (or fail to come up with), and you know instantly that 12 randomly chosen folks can really mess things up. Let alone 500...

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#22) On August 26, 2010 at 6:38 PM, starbucks4ever (97.57) wrote:

Here is a very simple litmus test. Hear a hardcore Republican rave about deficits, and when he finishes, ask this short question: so, do you want Bush's tax cuts to expire? 

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#23) On August 26, 2010 at 7:12 PM, starbucks4ever (97.57) wrote:

hi, whereaminow,

Discussing Das Kapital would be a fascinating project, but my contribution to the discussion would be limited because I haven't read the entire book. I would have much better erudition if I were 5 years older - that would expose me to historical and dialectical materialism plus the history of the CPSU as a boon :). 

From what I know of Marx, I suspect that his message has been grossly misunderstood by the Marxists - the same thing that happened to Christ, you know. But it is clear that even without distortions, he had absolutely no clue how political power works. His economic analysis is another story, however, and I think (again, from my limited knowledge) that it's largely correct, and has been incorporated into the structure of the American capitalism in two steps: first in 1913 (the Fed) and then in 1929-33 (the New Deal). That's how, in my opinion, we can have the relative prosperity under the capitalist system.

If you want to comment on Marx, I think you may do well to start with his early philosophical manuscripts rather than his main work, Das Kapital. They should provide you with a better insight into the Hegelian paradigm through which he viewed economics. Otherwise, you may read Das Kapital too literally.

Anyway, looking forward to the discussion. 

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#24) On August 27, 2010 at 5:41 AM, saunafool (98.80) wrote:

My point was that it is inconsistent for Republicans to call for a decrease in spending without a decrease in military spending.  The economy does not care where the money is going.  It only cares that money that could be put to productive use by private citizens is being taken away by the government.

David,

I agree with your main premise that the Republicans will not cut spending any more than Democrats. The briefest look at the last 30 years of American politics should tell anyone that. It is amazing, however, that the Republicans can still sell themselves as "fiscally conservatives" given their last 30 years of track record.

My one disagreement is that I believe the economy cares where the money goes. I'm not saying military spending has a great multiplier. However, I think there are clearly things like education, infrastructure, and other spending priorities which often have a positive return on investment. 

That would be an entire thread on its own, but the point being that I think the economy does care where the money goes.

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#25) On August 27, 2010 at 5:57 AM, saunafool (98.80) wrote:

David, 

The same argument could have been made after WWII.  Yet unemployment fell, combined with a 75-80% reduction in government spending after the war.  And the economy grew significantly in the late 40's into the 1950's.

I don't think this is a very good analogy. The only similarity was the winding down of industry and returning of troops. Here are some key differences I see: 

During WWII, Americans were forced to ration and sacrifice so that all available resources were directed towards the war. At the end, there was huge pent up demand for everything.

Due to the work during the war and forced saving from rationing, a lot of families had positive bank accounts.

Due to the Depression before and rationing during the war, demand was artificially low for 15 years and the price of everything was incredibly cheap.

The U.S. was a massive net exporter of manufactured goods AND OIL, so as the rest of the world rebuilt, American industry was a huge beneficiary.

The rest of global production capacity was destroyed during the war, limiting global competition during the rebuilding effort. In 1950, the U.S. accounted for something like 58% of Global GDP.

Today, people have spent the last 30 years spending more than they earned. They have all the comforts, cars, and gizmos they need. Very little pent up demand for anything.

Plus, due to heavy use of credit for the past 30 years of consumption, very few families have a positive bank account to purchase anything even if the demand was there.

With everything financed from easy credit, prices remain near historical highs compared to incomes--particularly for real estate in most cities. Finally, there is huge excess supply on the market--for cars, houses, furniture, or almost any other capital good that would drive economic growth. Exactly the opposite from the end of WWII. 

So, what we have here is the end of the credit cycle. Japan 1993 is a much better comparison for where we are than the U.S. in 1946.

That is also a thread on its own.  

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