A Dissent and a Concurrence

While Rep. Erik Paulsen's criticisms of the American Recovery and Reinvestment Act of 2009 have been stupid, I remain unconvinced that it's going to work--and that the spending will benefit the economy in the long run. I hope I am proven wrong.

On fiscal matters, Rep. Paulsen is schizophrenic: He claims to support a permanent ban on federal borrowing while faulting Pres. Obama's Stimulus Package for misallocating the federal CARE package. So Erik Paulsen simply misunderstands basic economics. What should responsible adults think?

I'm a deficit hawk, a free trade supporter and a Keynesian. So I'd like to reduce the deficit [as a percentage of GDP] in the long run. A sensible economic policy should reduce the deficit over the course of a business cycle. During a steep economic downturn, it might well make sense to borrow to get the economy moving again. But I'm not convinced that the just-enacted Stimulus Package represents a politically-neutral and efficient use of resources. Were I CD3's congressional representative, I would have voted against the Stimulus Package.

Eric Black also expresses skepticism about the Stimulus, but he's decided to hold unrepentant Balanced Budget Amendment supporters blameless: 'There are no atheists in foxholes and there are no fiscal conservatives on the brink of a Depression.' While Black's viewpoint is idiotic, it is also the conventional wisdom. My rationality-based viewpoint--that anyone formerly allied with the Balanced Budget Amendment who now advocates massive government borrowing ought to be called to account, and asked to clarify whether they still support a permanent constitutional ban on federal borrowing--is still considered beyond the pale. In the marketplace of ideas, moronic equilibria can prove surprisingly long-lived.