A Brief History…

UPDATE: This takedown of Paul Krugman is hilarious. He attacks Bunning and is show to be an incredible phony.

Krugman:

Today, Democrats and Republicans live in different universes, both intellectually and morally.
“What Democrats believe,” he says “is what textbook economics says” But that’s not how Republicans see it. Here’s what Senator Jon Kyl of Arizona, the second-ranking Republican in the Senate, had to say when defending Mr. Bunning’s position (although not joining his blockade): “unemployment relief “doesn’t create new jobs. In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work.”

Krugman scoffs: “To me, that’s a bizarre point of view–but then, I don’t live in Mr. Kyl’s universe.”

Taranto:

What does textbook economics have to say about this question? Here is a passage from a textbook called “Macroeconomics”:

“Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. . . . In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker’s incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of “Eurosclerosis,” …

So it turns out that what Krugman calls Sen. Kyl’s “bizarre point of view” is, in fact, textbook economics. The authors of that textbook are Paul Krugman and Robin Wells. Miss Wells is also known as Mrs. Paul Krugman.

Unbelievable.

Jim Bunning was a famous major league pitcher who was elected to the US Senate in 1986 from his home state of Kentucky. He has had a reputation as being a bit quirky, especially in recent years and he announced last year that he would not seek re-election. He is 79 years old and would be 80 at the start of his next term. He has been in the news lately for a one man objection to extension of unemployment benefits. Naturally, his position has been demagogued all over the world and he finally gave in in return for a symbolic vote, which will be meaningless since his fellow Republicans left him to face the world alone. The story was that he is “an angry Senator” who does these quirky things for no good reason. For example, he attacked the Treasury Secretary for his responsibility in the financial crisis. Bunning has been saying inconvenient things about the current fiscal crisis. For another example, his objection to the unemployment extension was the failure to pay for it by deleting other spending.

Andy McCarthy explains what happened and why it matters.

The Kentucky Republican finally caved in Tuesday after relentless pressure from other senators — including Republicans — to drop what the Politico called his “one man” filibuster of a bill to extend expiring unemployment benefits. Technically, it was not a filibuster. It was an objection to a procedure, called “unanimous consent,” used to speed along uncontroversial legislation.

He was right to do so. These extensions happen continually. The stimulus — which is a redistribution of wealth from the private to the public sector, and from people who work to people who don’t — extended unemployment benefits for 53 weeks. Another extension in November added 20 more weeks. Cato’s Alan Reynolds reports that this brings the total to 99 weeks of benefits in high-unemployment states. The measure on which Bunning has relented adds another month. And having browbeaten him into withdrawing his objection, Democrats will now seek an extension through the end of this year, i.e., another 36 weeks or so.

The Democrats gave him a small concession for withdrawing his objection. His amendment to pay for the extension by canceling one of the many “green initiatives” that are throwing billions down that rat hole, will be allowed a vote. The vote, of course, will be lost because he was not supported by his fellow Republicans. His lonely stand for fiscal sanity was a tiny drop in an ocean of recklessness. He explains himself today in an op-ed.

None of this is paid for. Instead, the government borrows ever more money, incurring ever more debt and ever more interest on that debt. The price tag on the relatively modest, stopgap measure Bunning was blocking is put at $10 billion, but that does not count the interest that will be paid on the money borrowed to fund the bill. To count the interest would be to highlight the fact that we are filching the money from our children and their children rather than paying for spending today by cutting something else. Bunning wasn’t even against spending the money; he just wanted the something else identified and cut.

That proved unacceptable, and not only to Democrats. Maine’s Susan Collins took to the Senate floor to assure Americans that Bunning’s radical views about Congress’s not spending yet more billions it doesn’t have “do not represent a majority of the Republican caucus.” And sure enough, they didn’t. Once Bunning backed down, the measure passed by a whopping 78-19.

In this case, there ought to have been raging controversy: Bunning was objecting to yet another monthly extension of unemployment payments absent an explanation of how it would be paid for.

This why we should be suspicious of Republican assurances that they will prove fiscally conservative once elected into the majority. They are also the party of government; just a little more slowly.

Think about that. We are talking about $10 billion in a year when Leviathan is slated to spend a total of $3.6 trillion. The majority of Senate Republicans joined Democrats in concluding that the allocation of every one of these 3.6 thousand billion dollars is so vital that not one of them could be sacrificed in favor of unemployment insurance. So another $10 billion just gets heaped on the already unfathomable trillion-dollar deficits stacking year upon year.
The pols call these mounting months (now years) of unemployment benefits “temporary,” even though the real unemployment rate remains in the double digits and no relief is in sight. The “temporary” label is a budgetary trick. It enables lawmakers to sidestep “PAYGO” — Pay As You Go — restrictions that require the federal government to pay for current obligations out of current revenues. Democrats recently made a big show of reinstituting PAYGO — but not until after they’d blown deficit spending through the stratosphere.

I am taking steps to cope with another Depression. The Republicans don’t seem to be concerned. Read the rest of McCarthy’s article.

Tags: economics, politics

This entry was posted on Thursday, March 4th, 2010 at 8:16 am and is filed under economics, politics. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.