Now that the Republican Convention has ended, can we move on to the one bedrock but unspoken truth underlying all the accepted distortions of closed factories and $716 billion cuts and all the standing O’s on behalf of tax and spending cuts? We will be getting a stimulus program next year, no matter who wins. Last night, Mitt Romney gave us a sense of how that will work.
First, all four candidates have articulated arguments in favor of stimulus spending, including both Romney and Ryan.
In 2009, Mitt was unambiguous about his preference for a Keynesian plan:
“I think there is need for economic stimulus,” he said.
And in the 2008 campaign, Mitt offered a specific spending plan, not unlike Obama’s original, with which he hoped “to provide a stimulus to our economy on a short-term basis as well as ignite long-term growth in the American economy.”
And of course Paul Ryan, as Chris Hayes has shown, loved the idea of stimulus spending when George Bush was president:
Obama and Biden are also running on the claim that the limited and early stimulus spending they enacted slowed the half-million jobs lost per month in the final days of the Bush Administration to the admittedly feeble 50,000–100,000 monthly gain we have now. But here’s the reality that all of them know: A consumer economy can only be kickstarted when consumers find that there is more money in their pockets. The fastest way to accomplish that is to create hundreds of thousands of new jobs with taxpayer money. Waiting for the private sector to organically produce those jobs has produced the last two to three years of economic doldrums. “You have to spend a little to grow a little,” said Paul Ryan on January 8, 2002. Putting money in the hands of consumers by flushing taxpayer dollars into the system and keeping the unemployed hopeful until jobs appear are the “time-tested, proven, bipartisan solutions,” as Ryan once explained on the House floor.
This is no mystery to this, at least in the conversation that happens beneath the campaign rhetoric of “cut spending and cut taxes.” Liberal economists have spent three and a half years making the case that we should do this in a big way, and some conservatives, perhaps unhappily, admit that it will happen.
“It’s not a matter of whether a President Romney and a Republican Congress would pass a stimulus,” wrote Scott Galupo in American Conservative magazine a few days ago, “It’s a matter of what they’re going to call it.”
Listening to Romney’s speech last night, it seemed clear he will center his stimulus spending foremost around energy policy. (How he will make the case rhetorically is unclear. Perhaps deploy the Truman and Eisenhower tactic of arguing that national security requires us to set aside ideas of austerity.) A Romney energy policy will translate the Republican euphemism “Drill, baby, drill” into its underlying economic meaning: “Spend, baby, spend.” He will move immediately to underwrite the Keystone Pipeline, loosen up drilling applications by handing that responsibility to the states, and open federal lands and offshore locations to an oil-exploration Renaissance.
“Three million jobs come back to this country by taking advantage of something we have right underneath our feet,” Romney said a few days ago, in announcing the details of his stimulus—uh, energy—plan. “That’s oil, and gas, and coal. We’re going to make it happen. We’re going to create those jobs.” Never mind that a recent Congressional Budget Office report stated that opening American land to drilling would produce a meager $7 billion over ten years.
Given the tax subsidies and other types of federal spending required to achieve even that tiny gain, this part of the Romney stimulus package would cost us dearly. But then, as economic historian Dick Cheney once noted, “Deficits don’t matter.”
