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Tea-partier explaining the benefits of Keynesian economics

August 26th, 2011 · No Comments

Hilarious, this..
From The Economist

Stimulus thinking
Adventures in tea-party cognitive dissonance

THIS (gated, sorry) was the most amazing thing I read today. It’s a couple of weeks old, but bear with me here. It comes from a post by Judson Phillips, the Tennessee lawyer who heads Tea Party Nation, a far-right pressure group, objecting to prospective defence cuts proposed by the administration, which he refers to as “the Party of Treason”. Rather than downsizing from 11 to 9 carrier task forces, Mr Phillips says, we should be building even more aircraft carriers:

If we decided to build a couple of new carriers, thousands of workers would be hired for the shipyards.  Thousands of employees would be hired for the steel mills that would provide the steel for the hull and various sub contractors would hire thousands.  Do you know what that means?

It means they would receive paychecks and go out and spend that money.  That would help a recovery.  That is a shovel ready project!

Increasing spending for the military does a couple of things.  It not only not only stimulates the economy, it protects our nation.  That is a better investment than say spending money on teaching Chinese prostitutes how to drink responsibly.

Now, an aircraft carrier costs about $9 billion. The prospect of someone in the government trying to design a programme that could spend $9 billion teaching Chinese prostitutes how to drink responsibly fills me with limitless mirth and joy. I think to succeed in spending that kind of money, you’d basically have to stage the programme inside a brand-new purpose-built aircraft carrier.

But what’s amazing here, obviously, is that Mr Phillips is justifying building aircraft carriers because government spending creates jobs and stimulates the economy. And he’s right about that! But it seems that there are no other things the government spends money on, apart from defence, that Mr Phillips believes can stimulate the economy. He appears to believe that while government spending on aircraft carriers leads to workers getting hired, spending their paychecks, and helping the recovery, government spending on highways, high-speed rail, education, and health care does not. Meanwhile, Mr Phillips also believes, as he argued in a Washington Post op-ed last week, that the government shouldn’t borrow any more money, because that’s leading us to economic ruin, like Greece. And he believes that the government shouldn’t raise taxes, because that kills jobs. So where is the money supposed to come from? We’re left with one possibility: Mr Phillips believes that we should build more aircraft carriers to stimulate the economy, and fund it by cutting other government spending programmes. But obviously when you cut other government spending programmes, the people who were working for those programmes lose their jobs, stop receiving paychecks, and stop spending money, which harms the recovery. And then there’s the question of how many $2.6m prostitute-safe-drinking programmes you can find to cut. You need 3,500 of them to fund your $9 billion aircraft carrier.

The tea-party movement has spent the past year arguing that stimulus doesn’t work and cannot, by nature, create more jobs or economic activity. The idea that a major tea-party figure can turn around and make a bog-standard argument for defence spending on Keynesian grounds testifies to a startling capacity for cognitive dissonance. I’m impressed. And just to make it clear: I believe that it is absolutely worthwhile to explore whether Chinese prostitutes would be less likely to contract HIV if they learned some techniques and habits to avoid becoming drunk in encounters with clients, and I have every confidence that the money for the programme Mr Phillips attacks was awarded in a proper merit-based fashion.

Tags: Economics