My motto for the new year is the serenity prayer:
God grant me the serenity to accept the things I cannot change,
Courage to change the things I can,
and Wisdom to know the difference.
In some of my other websites and blogs I am careful to keep my opinions to myself so as not to offend anybody or take away from their mission. By coming to this site you are affirming your willingness to read my rants.
My motto for the new year is the serenity prayer:
God grant me the serenity to accept the things I cannot change,
Courage to change the things I can,
and Wisdom to know the difference.
Republicans have once again gone all in for voodoo economics — the claim, refuted by experience, that tax cuts pay for themselves.What does voodoo economics mean? It's a term used by none other than George H. W. Bush in reference to President Ronald Reagan's economic policies, which came to be known as "Reaganomics". Karl Case & Ray Fair, Principles of Economics (2007), p. 695 pointed out:
The extreme promises of supply-side economics did not materialize. President Reagan argued that because of the effect depicted in the Laffer curve, the government could maintain expenditures, cut tax rates, and balance the budget. This was not the case. Government revenues fell sharply from levels that would have been realized without the tax cuts.The basic issue in a recession, like we are seeing now, is a shortage of money. This leads to downward pressure on incomes and prices as money becomes more valuable. People (and corporations) who have money don't spend it, they hoard it, thus people (families) who need money to pay bills can't get it.
Paul Krugman, like me, is a liberal, but that's not the only reason I like him. I actually think he is right. The Government has to be the spender of last resort. You can't save your way out of a depression, you have to spend. Spending is the only way to create jobs. That is exactly what we did in World War 2. From an economics point of view, WW2 was a massive government jobs program. On his blog Krugman writes:
A spending freeze? That’s the brilliant response of the Obama team to their first serious political setback?
It’s appalling on every level.
It’s bad economics, depressing demand when the economy is still suffering from mass unemployment. [Read More]
In my opinion World War 2 may have ended the effects of the depression, but it was the New Deal programs of President Franklin D. Roosevelt that started the recovery. This recovery, I think, would have been much further along had not a new conservative coalition caused a rollback of the New Deal policies in early 1937, which caused a setback of the recovery. A setback that it took a war to set right. In my opinion Obama's spending freeze is another such setback. Hopefully it will not take another World War to set things right.