GOP Mind Games, Job-Killing Edition

| Thu Jun. 23, 2011 9:32 AM EDT

It's an article of faith among congressional Republicans that, if you repeat a talking point often enough, no matter how inaccurate it is, it will eventually take root in the minds of Americans. Case in point: A new Bloomberg poll finds that 55 percent of Americans believe spending and tax cuts are the best way to lift the US labor market and lower unemployment, now at 9.1 percent, as opposed to more government spending.

That's straight out of House Republicans' "cut-and-grow" playbook, in which the road to economic prosperity entails slashing corporate tax rates and billion-dollar cuts to "job-killing government spending."

Except that's not true.

Alan Blinder, a Princeton economics professor and former Fed vice president, thoroughly debunked the GOP's claims on Tuesday in a Wall Street Journal op-ed titled "The GOP Myth of 'Job-Killing' Spending." Blinder writes:

The generic conservative view that government is "too big" in some abstract sense leads to a strong predisposition against spending. OK. But the question remains: How can the government destroy jobs by either hiring people directly or buying things from private companies? For example, how is it that public purchases of computers destroy jobs but private purchases of computers create them?

Blinder easily knocks down claims that the 2009 federal stimulus—roughly $600 billion in spending and $200 billion in tax cuts—failed to create jobs, pointing to Congressional Budget Office data that shows the net job gain was at least 1.3 million and perhaps as high as 3.3 million. What's more, Blinder debunks the idea that the federal deficit and the uncertainty that comes with it has caused companies to scale back business investments, which in turn impacts hiring and economic growth. Except such investment soared in the past year, increasing 14.7 percent. Ultimately, Blinder argues for another round of stimulus—specifically, giving businesses that grow their payrolls a tax credit—while calling for a serious long-term deficit reduction package.

And Blinder isn't the only expert to dismantle the GOP's economic position. In an interview with Yahoo News' Lookout blog, a former top economic aide to George W. Bush said the GOP's cut-and-grow agenda doesn't make any sense. "That wouldn't square with the way we normally think about economic activity in a depressed economy," said Andrew Samwick, now an economics professor at Dartmouth. Samwick, like so many other economists, points out that increased spending is a proven way to ramp up hiring and spark economic growth. Slashing spending does the opposite.

Yet Republicans have hammered away with their cut-and-grow mantra so much that they've convinced a majority of Americans to believe the unbelievable. You've got to hand it to Republicans: They may be wrong, but they are convincing.