What do you call someone who deprives millions of decent health care, but offers a $15k bonus to affluent people who flip their houses? Centrist.
The stimulus bill just passed by the Senate is dizzying to say the least. The basic economics behind is challenging enough, but add to the conversation the incessant chatter of the Republicans who falsely claim the bill is full of “pork” and the 3 Senate Republicans who voted for it — only after negotiating much of the provisions that would have provided any help to the average American. Paul Krugman says:
Even if the original Obama plan — around $800 billion in stimulus, with a substantial fraction of that total given over to ineffective tax cuts — had been enacted, it wouldn’t have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years.
Yet the centrists did their best to make the plan weaker and worse.
One of the best features of the original plan was aid to cash-strapped state governments, which would have provided a quick boost to the economy while preserving essential services. But the centrists insisted on a $40 billion cut in that spending.
The original plan also included badly needed spending on school construction; $16 billion of that spending was cut. It included aid to the unemployed, especially help in maintaining health care — cut. Food stamps — cut. All in all, more than $80 billion was cut from the plan, with the great bulk of those cuts falling on precisely the measures that would do the most to reduce the depth and pain of this slump.
On the other hand, the centrists were apparently just fine with one of the worst provisions in the Senate bill, a tax credit for home buyers. Dean Baker of the Center for Economic Policy Research calls this the “flip your house to your brother” provision: it will cost a lot of money while doing nothing to help the economy.
All in all, the centrists’ insistence on comforting the comfortable while afflicting the afflicted will, if reflected in the final bill, lead to substantially lower employment and substantially more suffering.
The question now is, what have we learned from this? What has President Obama learned from this? And will the stimulus bill that is hammered out between the House and the Senate do enough to right the wrongs pf 8 years of incompetence?