Okay look: I don't want to be the last person in the world who believes that tax cuts and laissez-faire policies are the engine of a healthy economic system (I hope it's not too late?!). So I'm willing to come over to the light side if somebody will just follow the logic of Democratic/progressive economics through to its conclusion. I admit that I have read more books on the laissez-faire side than I have on the... other side. It's likely I've been lopsidedly educated on the matter of economics. I want to find a better explanation.
The question is: if government intervention and federal spending stimulate the economy to a greater degree than cutting taxes and laissez-faire-ing, then the government that spends the most and regulates the most should have the strongest economy... right? If federal spending on stuff like "infrastructure" adds more jobs than the market can left to its own devices, then why should there be any ceasing?
I cannot understand (This is not an ideological argument. I'm ready and willing to convert. I'm waiting to be convinced--) why America's Democrats are not socialists. If more government spending is a good thing, crank that shit up! Why bother to include tax cuts in a stimulus package? Follow the logic through to its conclusion.
[Here I am even willing to concede that I was brainwashed from 4th grade through college to believe that communism fails every time. I am willing to concede that Fourier was a bad and desperate example, that Marx was misinterpreted, that Russia was the wrong place for it, whatever. I just want to hear a theoretical model: I want to hear a reason: I want to understand why you think the stimulus plan will work: and I want to understand why no one has understood it until now: and I want to understand why you think the Bush administration was an exemplar of laissez-faire policies: I want to see a list of which of Bush's programs were essentially laissez-faire so that I can feel confident that opposing those (failed) policies with socialist government control is a good response.]
I also can't understand why the American public (via its public representatives) seems to have lost faith in the idea of supply & demand. And there was a time not long ago when it was understood very distinctly that if a government wished to spend more on public works it would have to pay more in taxes--I cannot understand when that idea was proven unsound.
I am genuinely interested in understanding what makes an economy work, and I cannot understand what the trick is. What do we believe, people? What makes an economy grow? How are jobs created? What determines the price of a house? What determines who should get a loan? I want to know, and I'm nothin'-but-pissed about this stimulus package until somebody tells me how these $900 gazillion dollars are going to make Americans wealthier in material terms.
Today on the radio I heard an economist supporting the stimulus package say something like this: "For every $1.00 in taxes we spend on public works we get roughly $1.50 of production in the economy. It doesn't work like that with tax cuts. With tax cuts, people just save their money: they don't spend it. We don't get as much as $1.50 back for every dollar cut in taxes."
Oh!? Good to know! Is that so? If we get $1.50 in production for every $1.00 of taxpayer money spent on public works, OPEN THE FUCKIN' SPIGGOT! Why stop at a trillion? Spend ten times that much! Spend a real gazillion. You'll certainly get a gazillion and a half back! How have we not figured this out yet? It's such a good deal.
Is this how it works?