How exciting!
A head to head battle!
Let's see how tax/service cutter states fare against those that raise taxes and maintain the services.

I'm not certain Keynes is right. I suspect he is. Confirmation by experiment should be fun to watch.

The GOP may be right. It is a bad time for Washington spending. But what about indirect aid?... Government grants so that states, counties and local bodies can spend?

Not that I necessarily oppose revisiting the WPA and their ilk...

I look forward to the day when the asinine "Government should run like a business" claptrap ceases.

Business prime directive = Profit
Government = Safety, education, health and defense.

Government exist, in large part, because business cannot ensure that the societal constructs that allow business to function stay in tact. The prime directive of business will not allow it. Business models only take human costs into account insofar as it relates to future earnings, including marketing (aka green-washing).

As long as crises cause government to implement Republican policies, what's the problem if the policies produce more crises?

When I hear comments like Sanford's--and remember, McCain made this nonsense a centerpiece of his "campaign"--I assume the speaker knows damned well he's full of crap, also knows that promising to "cut government spending" plays fantastically with low-information voters no matter the shape of the economy, and is assuming that everyone else in elected office will do the dirty work of being grownups while the speaker takes credit for being a man of the people.

In other words, these guys deserve a good poke in the snoot, because they know exactly what they're saying and it has zero to do with the health of the economy or the country.

Hey, if it was good enough for Herbert Hoover, it ought to be good enough for us! Enough with all this liberal Keynes stuff!

The GOP has been bringing on industrial strength stoopid for years. By now it's so deeply ingrained they can't stop it to save their political lives.

That he has no idea what he's talking about is apparently inconsequential.

This has never stopped Sanford from shooting his mouth off before. Why should it stop him now?

Why not prohibit federal stimulus spending in the districts of congressmen/women who oppose it? If the Dems had the vestige of a spine they would introduce such legislation and loudly advertise it. Force the republican to apply their(phony) principles in their home districts.

I'd like to see Boehner defending to local newsoutlets, Nancy Pelosi's decision to be sensitive to republicans economic philosphy and cut their districts out of the money train.

We'll see how well that goes over.

It is important to remember that the Sanford ilk still have 41 votes in the Senate. Does anyone out there think that they won't try to obstruct a meaningful stimulus plan? Does anyone think that Reid will force them into a real filibuster?

Steve,
Perhaps some of the rising star "wingnuts" in the GOP (including Gov Tim Pawlenty of Minnesota) do not want an infusion of federal money into state governments because they view of short-falls in state revenues as a means of further reducing government at the local levels. In other words, from an anti-government (anti-New Deal)perspective, perhaps they view the financial crisis as a "god sent" which will allow the further evisceration of government programs. Any thougts

I'd like to assume that Sanford, Boehner, and other conservatives don't want to deliberately destroy the economy

You're wrong. They'd more than love to as a way to reduce the federal gov't. Still trying to get it down to bathtub size. . .

Just to be clear, Sanford is partly right: you really don't want to increase taxes at a time like this.

Isn't this anti-intellectualism the only thing that the Republicans have left? It's what plays in their ever shrinking small group of southern and rural states.

When times go south you cut spending," Gov. Sanford said.

But when the kids get sick, you don't just stop feeding them. And that is the Republican solution to economics. Leave things alone and let them grow, and when things go bad, something else will come along to replace them. I call it parasite economics.

Shortstop has it right. This is just more know-nothing, populist, GOP demogoguery. Simple answers to complex problems play well to the base and when they help to keep taxes and labor costs low for business, it's a two-fer!

They are all Alaskans now...

This is of course dead wrong -- and confuses microeconomics with macro...

Did Sanford take his degree in sports journalism too?

So-called "conservatives" are simply lying when they say they oppose "government spending".

They are very much in favor of "government spending" as long as all the money goes into the hands of America's Ultra-Rich Ruling Class, Inc. -- the folks who, after all, concocted the fake, phony, trumped-up, corporate-sponsored, made-for-talk-radio, pseudo-ideological cult of modern American "conservatism" to begin with.

What so-called "conservatives" are actually opposed to is any and all taxation of America's Ultra-Rich Ruling Class, Inc. -- in particular, any move by the Obama administration and Democratic Congress towards pre-Bush, Clinton-era, very slightly less regressive tax policies -- in order to fund government spending.

They want government spending on welfare for the ultra-rich to be funded by borrowing from China and Saudi Arabia, with the debt to be paid (and paid and paid and paid forever) by the American working class and middle class (who are increasingly indistinguishable groups: just working people scraping by from paycheck to paycheck).

So-called "conservatives" are committed to the pseudo-ideological agenda that is spoon-fed to them by their ultra-rich owners: that government is an instrument of power of the ultra-rich corporate aristocracy, whose purpose is to transfer wealth and power from We The People and consolidate it in the hands of a tiny, ultra-rich, increasingly hereditary, corporate oligarchy.

That's what so-called "conservatives" are really talking about.

Many South Carolinians--Republicans, at that--think Sanford has earned his reputation as 3rd worst governor in the country.

Why do you think SC is last or close to last in just about any measure known to man?

This perspective is wired into the republican DNA. Why do you think John McCain's initial response to the financial crisis was across-the-board spending cuts? Bottom line: they can't keep perceive the different realities between macro (government) and micro (individual) economics. Way too much gray there.

When times are hard, and a family is having trouble making ends meet, and family members know that their employers will give them a raise if they ask for it, they should instead cut back on transportation to and from work? Gosh that makes sense.

Just to be clear, Sanford is partly right: you really don't want to increase taxes at a time like this.

This sounds like another stanza in the same song that insists Abstinence-only education reduces teen pregnancy.

I'd like to assume that Sanford, Boehner, and other conservatives don't want to deliberately destroy the economy...

Are you sure about that after the past 8 years?

-Z

Hoover Hoover Hoover Hoover Hoover Hoover Hoover
Hoover Hoover Hoover Hoover Hoover Hoover Hoover
Hoover Hoover Hoover Hoover Hoover Hoover Hoover
Hoover Hoover Hoover Hoover Hoover Hoover Hoover

This may be easiest message ever for Democrats to stay on.

Other than that, what Danp said.

The worse you let it get, the more there is for wealth holders to scoop up at 10 cents on the dollar.

Short Squeeze Capitalism.

Just to be clear, Sanford is partly right: you really don't want to increase taxes at a time like this.

Money to spend doesn't appear ex nihilo (well, you can, as a government, just print more of it, but that has its own set of problems), you have to get it from somewhere. "Borrowing" vs. "Taxing" isn't really an important distinction, the important distinction is where you are borrowing or taxing from. If the money comes from some place where it otherwise would have been used in the domestic economy with a more stimulative effect (essentially, a higher velocity within the domestic economy), then, borrowed or taxed, you are shooting yourself in the foot. If it would have been used otherwise with a less stimulative effect in the domestic economy, you have a benefit, again, regardless of whether its borrowed or taxed.

When it comes to taxing, what you tax makes a big difference; all other things being equal, taxing the income of people who have a lower marginal propensity to spend money in the domestic economy has a different effect than taxing people where any change in income is going to result in a nearly equal change in spending in the domestic economy.

So that article published in Inc. magazine about the condition of the States balance sheets was pretty accurate. Then, it was suggested that twenty nine States are in financial jeopardy. Now it looks like more. Is that good management leadership or out right negligence? For me it looks like negligence. Criminal negligence.

For those that studies calculus and understand limits one knows that as you approach that notion of cutting taxes lower and lower to zero the point that revenues are jeopardized is immediate cut in services. With this entire tax cutting by Republicans, America finds it self in one the most basic work / business relating situations that have deteriorated to the point of crisis. Worse the alarm for this disaster was deliberately kept below the radar by Mainstream Media complicit in every way till the last minute were the demand in bail out must be made now.

Now watching the cable news about the bail out, and over sight board with arguments for it and the duties for it. The whole thing is an out rage. This one guy from Moody’s Investment just simply makes it clear this whole industry is loaded with negligence. My God where was this alarm a year ago. The consequences and the chain effect of all the companies involved are considered devastating.

It amazes me the Government does not size and assume control of these companies. The officers should not just be fired; they should be convicted and jailed because the viability involves national security. These companies make our military machines. Who the hell is kidding who?

He thinks the citizens of South Carolina would rather stay at home with an unemployment check than have a job.

Clueless Dick

Sanford is right. You (the author are wrong).

It is time to cut back government spending.

The alternative is to wind up like California.

All you fancy ecconomic theories are what got us into this mess to begin with.

As long as the CRA remains in effect. As long as Mark to market remains in effect. As long as government continues to try and bend the markets to their social engineering wills we will be in this decline.

....to hear GOP leaders tell it, the appropriate response to the current crisis is less investment and more spending cuts.

It's not 'investment', it's 'government spending', and it makes the Baby Jesus weep.

(I see pete beat me to the punch...)

If you're a company whose sales are declining, is your solution to cut back production, trim your product line, and fire a chunk of your work force?
It is if you want to go out of business.
You revamp your line, change your approach, roll out new product and boost both your advertising and your research budget. And you borrow to do it if you have to.
You could call it deficit spending. You could also call it investment.

""When times go south you cut spending," Gov. Sanford said. "That's what families do, that's what businesses do, and I don't think the government should be exempt from that process."

Except businesses raise prices "when times go south" in addition to cutting spending, etc.

They are all Alaskans now...

I'm sure that the good folks in South Carolina will be glad to hear that their state income tax and state sales tax are being eliminated and that Governor Sanford will be issuing each and every one of them a check for $3,200 this year. Honestly, other than having a right-wing demogogue for governor, I have a hard time imagining two more different states.

I'm tired of hearing people insult Herbert Hoover by comparing GWB to him. Before his Presidency, Herbert Hoover was a successful civil engineer who received plaudits for the work he did feeding hungry war victims in Europe during and after WWI. Indeed, as his Wikipedia article (http://en.wikipedia.org/wiki/Herbert_Hoover) notes, he was an international hero.

In contrast, before being selected President, GWB was, in rough chronological order, a drunk, a drug user, AWOL from the Texas Air National Guard, a failed oil man, a failed MLB team owner, and governor of a state w/a particularly weak governor's office.

Not much comparison.

-Z

If the problem of the economy was a lack of consumption, increasing public debt would be a good idea, as it was in the 1930's. When the problem of the economy is over-consumption, it is doubtful, despite what Econ 101 teaches, that increasing an already very large pubic debt, equal to a year's worth of GDP, for example, is going to save the economy. Tax cuts are not a universal panacea to repair economies, and neither is deficit spending.

The problem with the US economy is for the past twenty-five years almost all economic growth accrued to the wealthiest. Deficit spending probably will not resolve the problem of how to redistribute that wealth, unless the wealthy are made liable for the deficits, which has not been proposed.

While discussing economically idiotic political stands, let's add the condemnation of Wall Street. The standard view is that "incomprehensible financial structures" provided too much credit, leading to financial ruin, the disappearance of credit, and the recession. The reality is that these financial structures vastly increased the flow of credit, and thereby greatly enhanced the wealth of the nation and the world during the last 20 years. As always, however, there was too much irrational exuberance and not enough care taken. When speculators, fraudsters, and overly optimistic builders brought the real estate bubble to its well anticipated collapse, some of the dependent financial structures lost value, and in the ensuing panic the market for those and other securitized debt obligations froze, destroying the ability to mark these assets to market. Poorly drafted financial regulations demanding that all assets be marked to market every quarter then caused this temporary freeze to destroy financial balance sheets, forcing the firms to withhold virtually all credit in a desperate search for cash. The diminishment of credit was, in certain respects, a diminishment of wealth: overnight, we got much poorer. Who to blame? Let me suggest that the fault lies not so much with those who acted like normal human beings within the context of the US regulatory scheme, but with those who shaped that scheme and failed to adjust it to the realities that many pointed out. These include the financial leaders that lobbied to eliminate or block sensible regulation, and the Republican ideologues who mindlessly sought to eliminate any and all of it. But in their capacity as the executives and financial operatives who ran the system, the denizens of Wall St. are no more to blame than the crew of the Titanic was to blame for its sinking. Best we look to those who design the craft and choose its path.

Why are you surprised? This has been the Republican't cant for decades now.

Times good? Cut taxes and spending.

Times bad? Cut taxes and spending.

They DON'T CARE about the government OR the people.

They ONLY CARE about their fat wallets. Making them fat and keeping them fat.

They are sick misers.

I also saw Minnesota Governor Tim Pawlenty on MSNBC earlier this week making the same argument as Sanford. I have no idea how you can get elected governor of a populous state despite having no clue how economics works. Very scary.

Wall Street had to much debt
Automakers had to much debt
Families have to much debt

Now if we can get the US govt deeper into debt everything will be fine

Now if we can get the US govt deeper into debt everything will be fine

Now if we don't get the US govt deeper into debt everything will be absolutely horrible...

Because while we're sitting in the ruins of a once-great nation, we can warm ourselves with the glow that comes from being intellectually consistent.

Because it's better to live in a cardboard box under a bridge eating sparrows toasted on an old curtain rod than to entertain the possibility that the Austrians were wrong.

When the trade deficit bubble bursts, only lucky Americans will be eating sparrow. Americans already consume more than they produce. If Americans consumed less than they produced, deficit spending would be a corrective solution. No one knows how to stop over-consumption without enormous pain to the public. Keynesian policy is designed to deal with under-consuming economies.

As previously mentioned, Pawlenty is on this same inexplicable gig.

Please remember what an idiot this man is when he's being proposed as the next US VP or, god forbid, president.

The man's a nut. But a quick, smart and nasty nut. With a smooth shell.

Very dangerous.

Forgot to say.

toowearyforoutrage -- Keynes is right. It's already been experimented with, found to be more useful than any conservative economic theory, and had been the mainstay of Western economic control and growth until the repbnuts, repugnuts and neocons claimed some unsubstantiable, unproven economic preeminence.

Yes, a number of us do indeed plan to destroy the government of the United States -- nice and peacefully, please. We wish to do to the US federal government the same thing that was done to the Union government of the late, lamented USSR.

And I don't think you guys can stop us. History is on our side. The great governmental Leviathans are a dying breed. No government lasts forever, and the US government is in its death throes.

Here's to a world of city-states!

Dave Miller, Ph.D. in Sacramento

One is surprised that a South Carolina halfwit, carrying on a 300-year tradition of being the DUMBEST MOTHERFUCKING WHITE PEOPLE on the planet, is saying these things???

This is, after all, Ground Zero for Aemrican white supremacy and treason.

Too bad my ancestors weren't a bit more thorough in burning the place down when they passed through in 1865. We should have ethnically cleansed it of the white trash while we were at it.