Friday, October 28, 2011

The Republican Keynesians

This is incredibly funny.  From the party that says government doesn't create jobs and that government spending doesn't help the economy:
It took months of fighting — the threat of a government shutdown, the graver threat of a default on the national debt, and now a new threat of major, automatic cuts to Medicare and defense programs — but Congress’ deficit obsession has finally exposed the rarest of all species: Republican Keynesians.With just a under a month until the deficit Super Committee must recommend policies that cut the 10 year deficit by $1.2 trillion, members of the Republican party — the same party that’s been on the war path for deep spending cuts, and that decries President Obama’s “failed stimulus” — are making uncharacteristic arguments against slashing spending. Trim too much, too quickly, they warn, and people will lose their jobs!

Call them Defense Keynesians — GOP members who represent defense interests, veterans, service members, contractors, and others whose livelihoods would be impacted by deep cuts to defense spending. They don’t want the Super Committee to cut much more, if any, from defense, and they certainly don’t want to pull the so-called “trigger” which would cut defense across the board by about $600 billion starting in 2013, if the panel gridlocks.

In testimony before the Super Committee on September 13, CBO director Doug Elmendorf cautioned members that deep, quick cuts to government spending of all kinds would harm the feeble economic recovery, perhaps severely. Late in the hearing, as if reading from the General Theory, Sen. Jon Kyl (R-AZ) drew the obvious corollary: “[T]hat’s true of defense spending as much as other spending. Is that not correct?” he asked

“It’s true of potentially all types of spending,” Elmendorf said. “There may be differences across types. But I think that’s a more subtle distinction.”

Kyl went on, “And here, with defense, for example, you’ve got high unemployment of returning veterans to begin with. You have reduction in end strength. You’ve got more people potentially unemployed. You got people making radios and building ships and so on. And if those cuts, therefore, end up reducing the employment in those industries and the amount of money spent in those areas, obviously it could delay economic recovery.”

“Yes, that’s right, Senator,” Elmendorf responded.

Thank you,” said Kyl.

The irony is too rich