As we’ve previously noted in our interview with economist Alan Meltzer, President-elect Obama and many Democratic members of Congress are pushing for massive federal spending in health care, education and energy in an effort to create jobs. Jon Henke recently wrote about the challenge Republicans face in opposing such a measure:
Republicans are in a difficult situation here.
- If they oppose the bill and it fails, they will be blamed (fairly or not) for any economic problems.
- If they support the bill and it passes, they will share the blame for the enormous costs it will entail.
- If they oppose the bill and it passes, the lack of policy leverage would leave the bill much worse than if they had forced potentially valuable compromises (e.g., sunset provisions and exit strategies).
Henke also commented on a possible Republican strategy.
We’d like to hear your thoughts. How can Republicans effectively oppose the Obama plan? Heck, should they even oppose the plan? How should they approach their opposition? What alternatives should they offer? Please share your comments and thoughts!
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Ok where’s what I think we need to do about this. We need to get enough Republicans to filibuster this bill in the Senate because remember it is only 57-41 (2 Vacant Burris and whoever wins the Franken/Coleman mess, Plus I think we need a moderate Democrat or two to join us to make it like 55-43 or something. So we’d have the votes where they could hold off. Also we need to propose our own plan that would allow the free market economy to run it’s course plus we need MAJOR over site, I don’t believe the stuff that BHO proposes for transparency is workable. We need to STOP IT NOW!
Compromise! Our Republican government works best when both parties work together to compromise and create good bills. Stimulus is needed, and a well timed upgrade to our physical and information based infrastructure would not only stimulate the economy, but also be investments into our future.
Don’t try to fight against it, direct spending will inject money into the economy a lot more than the TARP money has.
Give me an example of “Our Republican government work(ing) best when both parties work together to compromise and create good bills.”
I think that’s a myth. Our government was designed to be inefficient, intended to stop as much “lawmaking” as possible. You see, back then government wasn’t thought the solution, while individually liberty was something to be preserved. Now it’s all reversed, isn’t it?
Just propose a stimulus bill in the form of eliminating the corporate tax for a couple of years. That’s roughly 35% of extra profits businesses get to keep. It will also stimulate the economy better than any stimulus package where you throw billions of dollars at the problem. If the government tries to buy our economy out of debt, it will only inflate our currency even more, and thus translating into greater loss in profits for everyone. This alternate solution allows money to be conserved, and reinvested where it should go, into the hands of profitable businesses. It will provide jobs, and it will be an original Republican idea. This probably will be voted down by the Democrats, but if this bill is even presented in Congress, it will take away a lot of support from the Democratic Party.
I’m not sure how tax cuts create less inflationary pressure on the dollar (assuming the same stimulus effect).
Regardless, if anything the $600/$1200 stimulus checks, and the bank money in the form of TARP payments have shown us that giving money in this troubled economic climate does not stimulate the economy because it does not get spent.
Giving money to those who will spend it (in the form of jobs for the unemployed, and projects for idling companies) ensures we get the most economic stimulus for our buck.
This crisis began in housing and to a lesser extent construction. The best way to restart the economy is from the bottom up, by shoring up these weak sectors. In this regard the infrastructure stimulus plan is needed, but so is a way to stem the flood of foreclosures, which neither party has done a good job of addressing.
If Republicans want to remain relevant and give a hand fixing the economy, it may do some good to float some ideas that aren’t just Reagan retreads. Lowering the marginal tax rates does make sense if the highest rates are 70+%, but they’re not anymore. If anything, the economy under Bush is an indictment of why lowering tax rates over and over again does not always work (law of diminishing returns, besides a non-zero optimal rate probably exists). You need some new ideas besides tax cuts to fix the economy.
I think that Mr. Henke is right in his thought process, Republicans should focus on lowering taxes, and emphasize spending reductions in the budget generally where possible. However, the Republicans should, in my view, outline and put forward their own specific counter-proposal to what the Democrats want.
The first thing that needs to happen is the current GOP Congressional leaders (Boehner and McConnell) need to go. They were key supporters of the No Banker Left Behind Act, and thus can’t credibly support a principled conservative resistance to the Obama plan.
They need to obstruct at all costs. This is a key turning point for our country. Obama wants billions in new federal mandates. We need to do our best to stop any new programs from being created because we know that once a program is created, it does not go away.
Republicans need to fight their hardest to make any new programs that are created temporary (as the Democrats were able to do with the Patriot Act). They also need to make an actual argument as to why throwing money at the problem will not work. They need to make the argument that giving up economic freedoms will not increase economic security. They need to turn all the Democratic arguments against them. It’s going to be hard since they spent the last 8 years with Bush (more liberal than McCain in every way) throwing money at everything that moved.
Basically, it is hopeless. We need to find a tax haven that will accept American expatriates.
I think they should fight the Land Bill, State Bailout, Public works Bailout and anti-comepitive subsidies, grants and tax credits, propose cuts to government and return to States what is their Bailiwick like education, housing, healthcare and energy. Encourage “elegant regulation” that sets standards, is effective, transparent and inexpensive, leaving it tto States to do most oversite.
Put forth tax credits for residential and business investment to incorporate alternatives that generate their own energy or substantial curbs use, I’d submit this is sufficient insentive.
Cut substantially government and taxes. Right now these grotesque pork projects only Bailout out corrupt localities, States, Unions and dirtectly funds politicians reelection campaigns. These people have failed to address their primary duties in transportation, education, the economy, entitlements and so much more.
We should not encourage in anyway this growth of government for the dangers far out way the risks and less government and less tax is acheivable and WILL have the economic stimulus which you seek.
The problem is explaining how States will have to adjust and that needs to come from the States and local grassroots and State Representatives simultaneously as a counter balance to the cauterwalling of the dependents and their caretakers, unions and subsidized big business.
You can not improve the enslavement of a population by State Capitalism and the monopoly of government that fails to perform when they are both the provider, the payor and the overseer. We need competition with out the insertion of charity or other anit-competitive aspects that manipulate value and risk. We need government to be honest brokers with commerce, charity and the individual fully carrying their rights and responsabilities.
Lisa Miller
I think it must be noted that governments cannot positively stimulate economies. Governments are a burden on economies. The only thing they can do is remove excessive regulation, taxes, excessive spending, etc.. That in itself is not stimulative, it is just less burdensome. The fact a \stimulus\ package is being contemplated through debt via greater future legal plunder, which supposedly will constitute economic growth, is at best laughable. Will someone please tell these economic ignoramouses on capital hill that economic growth does not occur by confiscating from productive individuals in the private sector and then spending it through political means.
The Republicans have a serious problem: President Bush and his Treasury Secretary Henry Paulson sacrificed free markets to save them. The GOP leadership helped rush TARP through passage. What it means politically for the GOP is this: Repudiate Bush/Paulson and TARP by fighting this “stimulus”, or get on the Obama bandwagon.