Paul Marin, Columnist
Ideology: Liberal Republican | Writing from: Constanta, Romania
The stimulus has failed.
At least the American people think so. According to a Rasmussen Reports poll released last week, fifty-one percent of Americans think that more jobs would be created if the remaining stimulus money would be cancelled. In the context of double-digit unemployment that is unlikely to significantly decrease by election day 2010, stimulus bashing, if wielded properly, can become a potent political tool for the GOP.
To be politically persuasive, a midterms strategy focused in part on stimulus bashing must be presented constructively and as a real solution to the people’s troubles – not as a rehash of the old scare tactics about the dangers of big government nor as a direct attack targeted at the Democrats or Obama. The GOP must highlight how the stimulus package’s gargantuan cost contributes to a massive deficit, which, in turn, hurts the economy and keeps unemployment up. But simply attacking the Democrats’ solution to the economic ailments, the stimulus, will not, alone, convince a sufficient number of voters to win back Congress for the GOP. Doing so risks to legitimize the stigma of “the party of ‘no,’” the line Democrats successfully used to discredit conservative solutions to previous recessions. Even worse, it would allow Democratic candidates to present themselves as the only substantive candidates with solutions to the issues. Therefore, the GOP must package the end of all uncommitted stimulus spending as a solution in its own; it must argue that by reducing the deficit — as a majority of voters think — and the risk of subsequent inflation, an economic recovery is more likely and that the financial gains of an economic upswing will not be eaten away by inflation.
What makes stimulus bashing politically powerful even more is the ease with which it can be translated into memorable lines. For example, the fact that the stimulus bill contains spending planned for 2019 can be used against the stimulus as: ‘The Democrats’ Plan: Jobs in 2019.” Such catchphrases possess unparalleled effectiveness because they address people’s immediate struggles — bills are due at the end of the month, not at the end of the decade.
However, the rhetoric against the stimulus is not a simple populist political weapon to be shrewdly used by politicians longing for power; it is also a necessary economic measure. There is a substantial case against economic stimulus than the ‘made for FOX News’ political messages outlined above. First of all, the role of Keynesian economic stimulus is to provide consumers immediate access to money and confidence through jobs which they can then spend back into the economy to rejuvenate it. Yet massive government spending on infrastructure projects, for instance, does not provide the job-creating effect intended. Think about building a bridge. Someone must first decide where and how to build it, then some government bureaucracy must approve it, and then work actually starts on the physical part of the bridge where the bulk of the jobs are created. Second, government spending induces inflation, which not only threatens to devour any gains families might see from economic recovery, but also encourages the creation of commodities bubbles — and when investors find that the value of money is rapidly deteriorating, they often switch en masse to inflation-resistant assets (for example, the gas price bubble of 2008). Finally, a superpower is not built on “bridges to nowhere,” roads no one drives on, and trains nobody ever takes. A superpower makes effective use of its resources. And in the 21st century global economy, resources are scarce. And those who binge on scarce resources will be punished with slow degradation.
In spite of its flaws, the stimulus bill contains a magnificent silver lining: its political vulnerability provides the unique opportunity to remove from office those who are enslaved to its defunct mentality.