(Still a recession at this end--woot!!--and I'm hoping a happy recession for all of you.)
Because many Republicans are in denial about the harm that came from pursuing a hands off, let the economy heal itself policy during the Great Depression, and because they cannot accept the prominent role that fiscal policy played in ending it, they are making the same mistakes all over again. Unfortunately, and perhaps by way of explanation, they won't have to pay for the costs of the their mistakes, those costs will fall largely on others, e.g. households who suddenly and unexpectedly find their financial foundations ripped out from under them as jobs that could have been saved are lost.
--Read more at Economist's View
"It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts." -- Sherlock Holmes
"How empty is theory in the presence of fact!" -- Mark Twain
"The great tragedy of science--the slaying of a beautiful theory by an ugly fact." -- Thomas Henry Huxley
Here's George Will (a pretty smart guy) twisting a single fact of negative net investment to fit his view of the world.
Republicans are (still!) chattering on about needing to cut the corporate tax rate to stimulate the economy. The U.S. statutory rate is something like 35%, which is one of the highest in the world, but the effective rate is a much more moderate 22% (or so). The theory is that companies pay a ton of tax, but the fact is that the U.S. is (almost) a tax haven.
Another great quote from the main article above: "Republicans focus on cutting corporate taxes, as though the problem confronting American businesses was the tax on their profits rather than the fact that, in the absence of sales, they have no profits."
The world is not exceedingly complex: Increase aggregate demand with Government spending.
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