As I was writing this post yesterday morning, I happened to be listening to Dick Armey, former GOP House Majority Leader, guest-hosting on CNBC's morning program for an hour.
He and the co-anchors were discussing the very subject of my post- the debt limit talks.
Armey had just finished explaining why taxes should not be raised and spending should be cut when network co-anchor and liberal Becky Quick began to cut in with,
".....but if spending is cut then the economy will....."
Her remark's end was lost amidst Armey's continuing comments and her realization that her words weren't getting any attention.
But notice what Quick's baseline hypothesis is. The elevated levels of federal spending under Wonderboy, up to 24% of GDP, are now to be considered sacrosanct by such liberal apologists as CNBC's liberal anchors.
Any attempt to cut the bloated spending is criticized as what Quick was trying to say- causing economic contraction because spending is removed from the economy.
Of course, last I read, the Keynesian 'C+I+G' equation still obtained, meaning that if government spending is decreased, then that money can be used by consumers to either spend, or save, in which case it can be used for investment.
Just because government doesn't spend money doesn't mean it disappears. Granted, deficit spending is spending that may not occur otherwise. But, then, perhaps it shouldn't.
But it's noteworthy that Quick and her ilk no longer recognize freeing up government spending for other uses as legitimate or appropriate but, rather, risky. So much for investing for growth. Instead, these media Keynesians are for more government spending now and forever, but calling it investment. That way, cutting it will seem bad- either because demand is lessened, or, heaven forbid, government investment in key technologies and projects has been eliminated.
They no longer see any room for non-government economic activity.
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