The horizon is not so far as we can see, but as far as we can imagine

Virginia Republicans Reject Stimulus UI Money

Image by Ookami Dou

Image by Ookami Dou

The poor will always be with us, or at least as long as Republicans are also with us:

Virginia’s Republican-run House of Delegates rejected a proposed expansion of unemployment benefits Wednesday, along with $125 million in federal stimulus cash to pay for it.

On a mostly party-line 46-53 vote, the House turned down amendments by Democratic Gov. Timothy M. Kaine that were necessary to make Virginia eligible for the federal aid.

Modern Republicanism laid bare: never help anyone who really needs help.  But that’s not the worst of it, the abysmal economic illiteracy is:

“It is not stimulus. Paying workers not to work does not promote economic growth,“ Byron said.

Actually, Delegate Kathy Byron, paying workers not to work does promote economic growth.  This is economics 101, people who have money (unless they’re useless rich) spend that money.  When they spend that money they spend it on products and services made by people who work.  The more of those products and services which are bought, the more economic growth there is, since you can’t have economic growth if there’s no demand for products and services.

In times when there is insufficient demand, like in a massive recession or depression, the best thing to do is for the government to spend.  And since there are people losing their houses, who are going without food, clothes and medical services, the best way to spend is to give those people money so you kill two birds with one stone: you get demand through spending, and you help people who need it so they don’t wind up starving or on the street.

But let’s extend this even further—when you have a demand problem and you also have very high income inequality (money pooling with the rich, who tend not to spend it) an even better way to increase demand is to increase tax rates on the rich, and then spend that money.  You could even give it to the poor and middle class, who haven’t had a raise in 30 years.

And yes, Byron, that would create economic growth, though I’m sure you aren’t capable of understanding that.  But it worked for FDR, Truman, Eisenhower and so on, and it would work now, while the Reaganesque policies of the last thirty years haven’t worked and have led to this disaster.

So, if you actually care about economic growth (we won’t pretend you care about unemployed people) you should both accept the UI money and push for highly progressive taxation.

I won’t be holding my breath for you to understand any of this, Byron, but I will hope that eventually enough politicians will decide to stop trying the same failed Reaganite policies over and over again, and do something that  works.

Eventually, after most of the current crop of legislators are unemployed themselves.

(h/t Not Larry Sabato)


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  1. Thank you Ian. Well stated.

  2. rumor

    Dear Virginians,

    Welcome to Canada, circa 2009. Not what you expected, I know, but we’ve been making some surprising and impressive headway in class warfare in our little socialist nation of late. Perhaps we can swap stories some time about how recently unemployed workers shamelessly demand to receive government support in their newly impoverished conditions. The nerve of these plebs! Perhaps you’d care to emulate our fresh approach here in the North by reminding the lower classes that it should never be lucrative to stay at home all day like a lazy bum. We’ve found that the message really resonates.

    Anyway, wishing you all the best in your efforts to turn your hearts to ice.

    The Harper government.

    (Sorry, couldn’t resist.)

  3. senecal

    Richard Estes at American Leftist yesterday proposed, among other better stimulus measures, raising unemployment insurance limit to $50,000. This would immediately revive demand, which would cause re-hiring, which would draw some of the money the banks are now hoarding back into the real economy.

  4. Ian, I’ve been listening to a lot of Jimbo Hoyer’s virtually speaking radio podcasts (including yours! awesome), and I’ve been wondering over Stirling Newberry’s comments vis a vis the Deep Liquidity People’s stance.

    Definition – Deep Liquidity = the Kim Kardashian/Paris Hiltons of the world, but with slightly less brains and much, much more greed.

    He, and now you, have said they’ll flee to resources. I know James Howard Kunstler has said he predicts super high oil (150ish), but though I dunno if that’ll happen – and I don’t want to give the impression that I think that’s even close to what’ll happen – what would go down on the world stage, given the recent G-20 summit that got nothin done regarding bank regulations, if oil goes up to, say 70 or 80 dollars? What would Hugo Chavez and Khameini (sp.) do? As to your last post on the middle east, what would this do to the situation between the Sunni and Shia in Iraq? I apologize for not knowing the distribution of the oilfields, but that’s sounds to me like something that should be top-posted on the Huffington Post for a long time.

  5. Oops! terribly sorry, wrong post for that comment.

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