LITTLE ROCK — President Obama says Republicans have been opposed to extending unemployment insurance to millions of jobless Americans when the truth is something else: They were happy to go along if compensating cuts were made elsewhere.
I guess the president forgot.
Obama suggested he did have some inkling of the deficit concern when he said Republicans did not mind adding to fiscal imbalance when they voted for Bushera tax cuts. But as the Heritage Foundation has noted, inflation adjusted revenues did not then sink below historic averages relative to gross domestic product. It was spending that led to deficits, and in his first year in office,Obama increased spending by more than twice as much as the Republicans did during those Bush years they controlled Congress.
I guess our leader forgot these interesting facts.
Obama defenders say that extended jobless benefits will be an unambiguous boost to the economy by adding 60 cents to American pocketbooks for every dollar spent even if the $35 billion cost is borrowed and must be repaid with interest.
The theory is dubious on multiple grounds, one being that any large increase in deficit spending at this time will likely make Americans less confident about the future, a big encumbrance to recessionary recovery.
What is more, study after study has shown that extending benefits actually keeps some workers from trying to obtain jobs. Those worried at least in the past about this consequence have included Larry Summers, director of the National Economic Council under Obama, Paul Krugman, the liberal economist who writes a column for the New York Times, and a whole bunch of congressional Democrats.
I guess they forgot.
Democrats rejected the Republican suggestion the money for the extension be taken from what’s left of the $862 billion stimulus bill. The rest must to be spent to create jobs on top of the millions of jobs already created by the package, some argue as if this were an unquestionable truth revealed to them by God.
The dogma, though, is unsupported by evidence. Among those once doubting such extravagance can significantly boost economies in deep hurt is Christina Romer, an Obama economic advisor whose research showed recessions ending fairly quickly without fiscal intervention. She now talks as if she has changed her mind.
Still, the shaky economic improvements we’ve seen are pretty clearly traceable to other causes, according to observers such as libertarian economist Alan Reynolds, who mentioned the earlier Romer thesis in acolumn.
And by the way, one area of previous stimulus-package spending has been-ta-da!-emergency unemployment insurance.
I guess the Democrats forgot.
Well, the Obama defenders say, let the Republicans put their votes where their mouths are. If they want to pay for the unemployment insurance, let them support the expiration of the Bush tax cuts in January, adding trillions in revenue in the coming decade. Let us gently mention one of many nasty considerations: the way tax increases stymie growth and flatten recovery possibilities.
The issue is not deficits and the debt per se, you see, but taking money out of the private economy where it generates new wealth without first being funneled through bureaucratic channels. A number of think tank whizzes tell us the only fix is to curtail spending. Fail to do it, and do it dramatically, and this country faces a bleak future.
I guess the defenders forgot again.
Look, we all know there have been political opportunities for the Democrats in making the Republicans look like Scrooge on this insurance issue. But even if you have noticed as I have that Republicans have their share of faults, they were aiming this time out to serve the population at large at the same time they hoped to aid at least that percentage of the jobless whose best efforts at finding work have failed.
The leftists were up to nothing so justifiable, and that’s worth remembering.
Jay Ambrose, formerly Washington director of editorial policy for Scripps Howard newspapers, is a columnist living in Colorado.
Editorial, Pages 16 on 07/22/2010