November 2011 | See all news in this issue

Politics and the economy…

As Washington’s great minds struggle to come up with a silver bullet to fix our ailing economy, the basic, partisan divisions are defined as starkly as at any time in recent memory. The question, which will be at the core of next year’s presidential election, becomes: Is the government the solution or the problem itself?

At the heart of the impasse is the inherent conflict between the need to reduce the $14 trillion national debt and the desire to create jobs for millions of Americans who are out of work. Even if there were agreement on the methods of spending our way out of our economic malaise, there’s no agreement on how to avoid putting ourselves into even deeper debt in the process.

There’s certainly reason to doubt that multi-billion dollar stimulus efforts will work. In the final year of the Bush administration (George W.), there was broad bi-partisan support for a $124 billion stimulus package along with a $700 billion bailout for big banks and insurance companies and $158 billion in tax cuts.

And under the Obama administration, we’ve seen the $821 billion TARP program, a $26 billion stimulus program to hire teachers and public-sector workers, an almost $900 billion extension of Bush-era tax cuts and the $3 billion “cash for clunkers” program aimed at stimulating car and truck sales.

The result: a jobless rate that is still north of 9%, with few signs that the overall economy is improving. Even proponents of stimulus acknowledge that these massive government programs have at best stabilized the economy and stopped the massive bleeding.

Lead, follow or get out of the way…

Republicans, including all of the current candidates for the GOP presidential nomination, are unified in their belief that the answer lies in getting the federal government out of the way and letting the private sector fuel an economic recovery. They argue that the earlier, massive economic stimulus efforts provided only temporary relief. They believe that federal taxes, regulations and anti-business policies are preventing a comeback.

The GOP is determined to block any new stimulus legislation, including the type of highway and bridge repairs, public works construction and employment incentives that they have readily supported in the past. Republicans argue that reducing the tax burden on business, particularly small business, will free companies to expand their operations and hire more workers in a way that government incentives will never do.

The Republicans have a laser focus on reducing the regulatory burden, particularly in the area of environmental and workplace rules. The recent White House decision to back away from proposed new rules on carbon emissions is an example of those efforts. Another example, the National Labor Relations Board decision barring Boeing from moving a plant to South Carolina, a right-to-work state, has become a poster child for this “get the government off our backs” movement.

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