I realize that contemporary Republican thought dictates that Keynesian, demand-focused economics is some sort of abomination. But the GOP’s philosophical objections might be easier to take seriously if the party were at least consistent about it.
Last week, Senate Minority Leader Mitch McConnell (R-Ky.) made a Keynesian argument to defend deregulation. Last month, Mitt Romney made a Keynesian argument explaining his approach to boosting the private sector. All year, asked to defend their spending priorities, all kinds of congressional Republicans have relied heavily on Keynesian arguments.
And now, this.
With just a under a month until the deficit Super Committee must recommend policies that cut the 10 year deficit by $1.2 trillion, members of the Republican party — the same party that’s been on the war path for deep spending cuts, and that decries President Obama’s “failed stimulus” — are making uncharacteristic arguments against slashing spending. Trim too much, too quickly, they warn, and people will lose their jobs!
Call them Defense Keynesians — GOP members who represent defense interests, veterans, service members, contractors, and others whose livelihoods would be impacted by deep cuts to defense spending. They don’t want the Super Committee to cut much more, if any, from defense, and they certainly don’t want to pull the so-called “trigger” which would cut defense across the board by about $600 billion starting in 2013, if the panel gridlocks.
Remember, during the debt-ceiling crisis, Republicans needed to give Democrats a concession to resolve the standoff. They weren’t willing to put tax increases on the table, so GOP leaders agreed to a “trigger” that would impose harsh cuts on defense spending. The point was to create an incentive for both parties to reach an agreement — if Republicans didn’t want to slash the Pentagon budget, they’d have strike a bipartisan deal.
But as the chances of the super-committee reaching a compromise evaporate, Republicans are now confronted with the possibility that their own idea — massive defense cuts — might come to fruition. And what’s their response? Spending cuts will hurt the economy and cost jobs.
As Brian Beutler put it, “[I]t’s hard to escape the conclusion that the only thing Congressional Republicans find more abhorrent than Keynesian economics is austerity for programs they like.”
We’re all Keynesians now.