February 9th, 2009:

via Op-Ed Columnist – The Destructive Center – NYTimes.com.

What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?

A proud centrist. For that is what the senators who ended up calling the tune on the stimulus bill just accomplished.

You try your damnedest to get the word out that massive spending, if it is big enough, will fill in the lack of demand and create jobs, but it falls on deaf ears. Now here is a Nobel Prize winning economist telling us that politics as usual has ruined our chances to pull ourselves out of this situation. The sad fact here is that he is so right.

Paul Krugman

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.

For every dollar spent on tax cuts the return is $.33, thirty-three cents. For every dollar spent on Food Stamps, the return is $1.73, over five times as much as tax cuts. The next best stimulus is unemployment benefits. For every dollar spent on unemployment the return is $1.64. I want all the Republicans in the world to read this and decide for themselves, without FOX, which is better – spending or tax cuts. How dumb is 33 cents compared to $1.73?

Obama and Congress had their chance to get this right but the right-wing would have no part in doing the right thing. The stimulus bill started out with way too many tax cuts in order to appease the right, then ended with funds for programs that would immediately inject cash into our economy stripped to the bone in order to appease the centrists.  How wrong can you guys be?

Krugman blames Obama:

But how did this happen? I blame President Obama’s belief that he can transcend the partisan divide — a belief that warped his economic strategy.

After all, many people expected Mr. Obama to come out with a really strong stimulus plan, reflecting both the economy’s dire straits and his own electoral mandate.

Instead, however, he offered a plan that was clearly both too small and too heavily reliant on tax cuts. Why? Because he wanted the plan to have broad bipartisan support, and believed that it would.

I blame John McCain and the rest of the Republicans for rejecting the extended hand of Obama. McCain railed about Obama’s lack of bipartisanship but never once made any moves to reduce the amount of tax cuts himself in a gesture of cooperation. Instead, McCain preached more tax cuts. Where’s the concessions from the right?

I don’t blame Obama. I blame the wrong-headed right-wing.