Families across the country are tightening their belts and making tough decisions. The federal government should do the same.It doesn't make a lot of sense to juxtapose family belt-tightening and federal belt-tightening. It makes even less sense for Obama to suggest that one justifies the other.
The rationale behind Keynesian stimulus is that weak consumer demand can kick off a vicious cycle. Families buy fewer goods; companies make less money; companies fire more workers; those workers make less money and buy fewer goods, and down we go. When families tighten their belts, the government is supposed to loosen its belt.
Indeed, loosening the belt is exactly what this government did when it passed a $787 billion stimulus plan just as the Federal Reserve bought trillions of dollars worth of assets. And before Obama got going with the belt-tightening parallelisms last night, he credited the recovery to ... the government's loose belts!
The plan that has made all of this [economic recovery] possible, from the tax cuts to the jobs, is the Recovery Act. That's right -- the Recovery Act, also known as the stimulus bill. Economists on the left and the right say this bill has helped save jobs and avert disaster.If you're a Keynesian, Obama's belt metaphor should make you weep softly. But even if you're an anti-Keynesian, Obama's belt metaphor make you laugh derisively. Here's why: The CBO projected that 2010 federal outlays would increase by $5 billion to $3.52 trillion. Freezing non-security discretionary spending (that's the belt-tightening we're talking about) might shave off about $15 billion. That brings net belt-tightening in 2010 to $10 billion -- or 0.3 percent of the total budget. One third of one percent.
Trumpeting budget cuts at that level is about optics -- and optically-speaking, I think it stinks. Obama's job as communicator-in-chief is to defend his policies. His job is to tell Americans what's going wrong, how he's fixing it, and why. His job is not to tell Americans that he think Keynesian stimulus is saving the economy, and then five minutes later subvert our understanding of economics with a nonsense belt metaphor that betrays the purpose of that very stimulus. This sentence does a disservice to both his economic policy and Americans' economic education, and it didn't belong in the State of the Union.
For me, last night’s State of the Union address will forever be entwined with next week’s season premiere of Lost, and not just because of the much publicized scheduling conflict between the two, television events. By imploring Congressional Republicans to cooperate with Democrats in confronting the many, critical concerns facing our nation, President Obama echoed the rallying cry of Lost ’s motley crew of castaways: “live together, die alone.”
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In principle, I agree with you, Derek. Yet the state of the nation's economic delusions is so great after three-plus decades of free-market fundamentalism, supply-side propaganda and tax-cuts-increase-revenue nonsense that it's going to take more than one recession or one president to reverse.
Obama did spell it out last spring, defending the large deficits in the short run because that's what a stimulus is. And maybe he should have tried more and had the White House and congressional Dems keep repeating the message. But the right-wing noise machine and congressional Republicans have been hammering away on this since before he took office -- and, amazingly, never getting called on it in the media, because our journalists now are empty-headed idiots who can't challenge anything outside of the day-to-day horse-race tactics and who's up/who's down scoreboard.
"Families across the country are tightening their belts and making tough decisions. The federal government should do the same."
The quote is two sentences.
I understand your point, but you're overthinking it: The belt tightening he's talking about doesn't occur until 2011--when presumably/hopefully we'll be out of the recession and won't need any additional Keynesian stimulus.
He is overthinking it. Americans don't want harsh realities and complex explanations. They want pithy catchphrases. Obama has tried explaining things in a sophisticated manner and the public has stomped on him for it. It's only natural that he'd turn to populist hogwash and inane taglines like the "belt-tightening" one, since it's apparently all that the American public can absorb. I'm not happy that he's doing it...but I don't blame him.