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Monday, September 12, 2011

The Continuing Republican Disconnect

Sept 12th, 2011

Jacob Weisberg pretty much nails the current disconnect between the policy positions of elected Republicans and traditional economics:

"There is no question that the current Republican position is eccentric as a matter of economics. Pick up any standard economics textbook, and it will explain how governments respond to cyclical downturns with temporary deficit spending. In Keynesian terms, boosting aggregate demand increases GDP growth and reduces unemployment. Conversely, cutting government spending during a slowdown tends to make matters worse. There may be circumstances in which temporary spending isn't possible, or where cutting government spending does not have the typical contractionary effect. But a thorough IMF study conducted last year concluded that "fiscal consolidation" does tend to have the predictable impact: shrinking GDP and raising unemployment."

Unfortunately, the House GOP has already signaled its intention to do everything they can to keep the economy stagnant. In response to the release of the President's jobs bill, the full text of which is available HERE, Eric Cantor had this to say according to TPM:

"Anything that is akin to the stimulus bill I think is not going to be acceptable to the American people," Cantor told reporters at his weekly Capitol briefing Monday. "I don't believe that our members are going to be interested in pursuing that. I certainly am not."

Of course Mr. Cantor is not interested. However, Mark Zandi, the chief economist at Moody's, is very interested and he put together this chart Mr. Cantor should read. It's unusual for Mr. Zandi to compose a graphic so simplistic it could be considered droll. Perhaps that's just what the GOP needs... economic cliff notes.

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