That, apparently, is what Democrats propose we do, and are urging lawmakers involved in the negotiations led by Vice President Biden to include in any potential deal new spending measures — in the form of infrastructure projects, clean energy subsidies and a payroll tax cut for employers — to “stimulate” the sluggish economy. Seriously:
WASHINGTON, June 22 (Reuters) – Efforts in Washington to head off a debt default faced a new hurdle on Wednesday as Democratic leaders called for additional spending to boost the sluggish economy.
Democrats’ demand for new stimulus spending is at odds with the work of negotiators, led by Vice President Joe Biden, who are trying to find trillions of dollars in savings as part of a deal that would allow Congress to sign off on new government borrowing before the U.S. runs out of money to pay its bills.
Those talks, which resumed on Wednesday, have largely focused on spending cuts over the next 10 years. Senate Democrats want the deal to include more money for highway construction, a payroll tax cut and clean-energy subsidies to bring down the 9.1 percent unemployment rate.
“Get the recovery right before you get in this deficit-cutting mode,” Assistant Senate Democratic Leader Dick Durbin told reporters. “Get people back to work. Let’s start moving in that direction.”
Republicans, who favor deep spending cuts, said that idea was not likely to go far in the Biden-led talks.
More here.
UPDATE: Sen. Chuck Schumer (D., N.Y.) comes right out and says it:
“This is a stimulus program,” said Sen. Charles Schumer (D-N.Y.), the No. 3 Democrat, adding that a package would be paid for in the long run as part of the deficit reduction package.
“Let’s say it costs $50 billion or $100 billion, we’re going to have to make that up to keep with the president’s goal of $4 trillion in deficit reduction over 10 years,” Schumer said.
The problem is not with Senate Democrats but rather Ben Bernanke, who today pulled the rug out from under the GOP, declaring that budget cuts for FY 12 will be neutral to negative for job creation -- which is entirely bogus.
We need an immediate cut of $400 billion or more just as a downpayment in FY 12 to calm the markets.
Bernanke today gave the Democrats their political cover and their talking points for more spending. The American people should be livid.
Reply to this commentLinkReport AbuseGW Bush 2007 tax credit, 2008 GWBush Tarp, Obamnaniac 2009 HAMP bailout for deadbeat homeowners, Obamnaiac UAW bailout, Obamaniac $830B STIMULUS!, 2010 BI-Partisan partial payroll tax credit. So for 3 years we had Repub, Dem and Bi-Partisan STIMULUS!, we had $3TRILLION DOLLARS more deficit spending, that didn't create growth or jobs, it just larded on $3 TRILLION DOLLARS of debt for American taxpayer, and the Dems want to do more of the same? Einstein said the definition of insanity is repeating the same experiment over and over and expecting a different result. The Dems are insane.
I agree with mathew 8787; the bernanke is a scared debt monger. He should be; he has enabled the Obamaniacs by monetizing the debt with QE and QEII; he's like AIG and Lehman bankers in August 2008, he knows the end is near for his debt empire, he just can't face up to it. If the BOJ directors didn't commit Seppuku in the 90s, I guess we shouldn't demand it of the Bernanke now.
Reply to this commentLinkReport Abuse"...new spending measures — in the form of infrastructure projects, clean energy subsidies and a payroll tax cut for employers"...
A payroll tax cut is not a spending measure. A reduction in taxes is not a spending program. If you accept that it is, you have lost the battle with the socialists. If you accccept that it is, you accpet that all income belongs to the governemt, and only by the grace of politicians are you allowed to keep some.
Reply to this commentLinkReport AbuseSo, now are the Ds proposing that we stimulate the stimulus to stimulate the stimulus that should have been stimulated three stimuli ago? I am confused ... and unstimulated!
Reply to this commentLinkReport Abuse$1trillion didn't do it, so obviously we need to spend a few $100Billion more.
Liberals are a broken record. The solution to every problem under the sun is more govt.
Reply to this commentLinkReport AbuseThe solution is more highway construction and green energy subsidies?
Folks, our fate is in the hands of obtuse lunatics.
Reply to this commentLinkReport AbuseWe are screwed.
Buy more guns.
Reply to this commentLinkReport AbuseNo, you probably have enough guns now. Buy ammunition and canned food!
Reply to this commentLinkReport AbuseIf I may be so bold as to co-opt a phrase from Michelle Obama and add a slight modification...
I have never been so afraid for the economic future of the country.
Not coincidentally, my fear began shortly after her husband was elected.
It's painfully obvious that the Democrats just don't get it. OR, for them, it's a strategy - a kind of "don't let a good crisis go to waste" strategy, only on steroids - lots, and lots of steroids.
Normally, I recoil when I hear someone say, "We're staring directly into the abyss". But, in this case, I'm not sure how else it can be described. Greece is the canary in our coal mine.
Reply to this commentLinkReport AbuseThis is the political equivalent of "Plan 9 from Outer Space." Hey, the previous 8 plans haven't worked, so #9's gotta be the ticket!
Idiots.
Reply to this commentLinkReport AbuseRepublicans: "tax cuts will decrease the deficit."
Democrats: "spending increases will decrease the deficit."
Every day is opposite day in DC, no wonder the finances are a mess.
Reduce non-stimulative spending dramatically, raise those taxes that don't deter investment. That would be a good start.
Reply to this commentLinkReport Abuse1) There is no spending that is stimulative.
Reply to this commentLinkReport Abuse2) There are no taxes that do not deter investment.
Neither statement is true.
1) WWII was pretty much the number one reason why the US economy rebounded from the Great Depression.
2) Taxes can increase net investment, by using tax revenues taken from less inelastic markets and putting them into markets with high potential growth such as technology.
Reply to this commentLinkReport AbuseTax cuts will spur economic growth. The deficit be hanged!
Tax revenues, increased by whatever means you fancy, will not solve our problems. As Reagan sayeth, government does not tax just for the money it needs. Rather, it finds a use for whatever it gets.
Reply to this commentLinkReport AbuseInfrastructure projects indeed. At the beginning of spring, work began on an entry/exit ramp from our local road to an interstate highway. The entry ramps were narrow and badly needed repaving. I thought it was a good project.
As spring has turned now to summer, it turns out that the project was to LANDSCAPE the ramp. Boulders were brought in, rocks of different colors laid down, faux Indian symbols painted on the overpass, an absolutely useless faux stone "fence" built. I don't like desert landscaping, so I think it's ugly to boot.
The entry ramps are still narrow and need repaving.
This is something NR should look into.
Reply to this commentLinkReport AbuseUnfortunately, our inefficient, ineffective and downright dysfunctional system of public education - its deleterious effects bolstered by the MSM and our cultural 'elites' - produces individuals who not only support power-hungry progressives like Schumer but also believe that what our economy needs is more progressive/statist economic 'solutions'.
If we are lucky we are at the critical tipping point, not past it, from which we either save our country or let it rapidly deteriorate into just another failed state in which freedom and liberty, and thus economic prowess, is sacrificed for 'social/economic justice' doled out by incompetent bureaucrats.
Reply to this commentLinkReport AbuseSo is Bill Gross of PIMCO wrong when he stated that the focus on deficit reduction is not the right path to economic recovery?
Reply to this commentLinkReport Abuse