Tuesday, November 25, 2008

Having Your Restraint and Spending Too

This was an actual headline today:

Obama Promotes Fiscal Restraint, Big Spending
President-elect Barack Obama wants to project fiscal restraint even as his economic team assembles a massive recovery package that could cost several hundred billion dollars.

WHAT? It is amazing that this passes as a serious news article in today's world. Expert, Leonard Burman, director of the nonpartisan Tax Policy Center adds:

"What's good about the appointments that Obama has made is that it suggests, in ways that his campaign never did, that he really understands this."

I am glad he does.

2 comments:

Burgess Laughlin said...

As Devil's Advocate, I would defend President-elect Obama by saying that "fiscal restraint" to some statists means balancing outgo with income.

If he is going to spend a huge amount, that means, unfortunately, that he will raise "income" (i.e., taxes) a huge amount. Thus he will be an example of fiscal "moderation," ideally never spending more than he takes in.

This is equivalent to riding on a fuel-efficient train as it roars off a broken track and over a cliff.

Doug Reich said...

I think you are still giving him too much credit.

If you were right, it would mean he would have to tax people and then spend it which would not be "stimulus" as they call it since it would be zero sum. The article said he wanted to "stimulate" with spending and then later (whatever that means) he would tackle spending (which I agree will be a combination of taxes on the "wealthy" and meaningless spending cuts).

This is classical Keynesian economic theory and it is as stupid as it appears.

It is also another example of how Obama is an arch pragmatist philosophically as I pointed out in a previous post (Pragmatist Fascist) and will discuss again soon. He literally has no principles and believes he must simply ACT and this translates into spend money you don't have and worry about it later.