I Don’t Think Mitch McConnell Understands Keynesian Economics

December 1st, 2011 at 6:21 pm

Here’s what he said in this AM’s WaPo re the payroll tax holiday that will expire by the end of next month if Congress fails to extend it:

“Republicans will put aside their misgivings and support this [payroll tax cut] extension, not because we believe, as the president does, that another short-term stimulus will turn this economy around, but because we know it will give some relief to struggling workers out there who continue to need it nearly three years into this presidency,” Senate Minority Leader Mitch McConnell (Ky.) said Wednesday.

OK, let’s unpack this.  Republicans don’t believe in short-term stimulus, but they do believe in providing relief to struggling workers.  But unless you beleive said workers will take their relief by snuggling in bed with their extra dollars, there’s no distinction here.

They’re struggling because they don’t have the resources they need to meet their family budgets.  If we keep the benefits of the tax cuts in their paycheck, or even increase them, as the President and Senate D’s have proposed, they will spend the extra money.  And that is short-term stimulus.

It won’t turn the economy around—the President has never claimed that it would, btw.  But it will add to growth and jobs.  If it makes you feel better, Senator, to tell yourself you’re not engaging in Keynesian stimulus, absolutely be my guest.  But your logic hurts my brain.

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2 comments in reply to "I Don’t Think Mitch McConnell Understands Keynesian Economics"

  1. fausto412 says:

    thinking through Republican logic hurts my brain too. I try to avoid it.

  2. Mavis Beacon says:

    I actually don’t think this is contradictory at all. He’s saying he supports the same policy but for a different reason, charity not economic impact. That makes perfect sense even if it’s also true that he can’t prevent the money from having an economic impact.