Senator John Cornyn (R- Texas) dodged and weaved his way through an interview on PBS, yesterday, revealing just how ignorant and dangerously foolish he is. Foolish about using the debt-limit deadline to extort agreement on destructive spending cuts from Democrats and the President. And ignorant about the ineffectiveness of tax cuts under current conditions. No responsible economist supports such a program.
PBS interviewer Judy Woodruff challenged him on this point. Why give tax breaks to firms that are already sitting on huge amounts of cash and not investing it?
Cornyn’s answer: “They’re sitting on that cash because they don’t know what’s going to happen in terms of tax rates and in terms of regulation, in terms of what the health care costs are going to be from the president’s health care bill that they didn’t anticipate and didn’t factor into their business model…. there’s a lot of anxiety out there.”
Surely, Cornyn and his Republican colleagues can’t be that ignorant. The picture of possible tax and regulation changes making corporate executives too anxious to invest would be laughable if it weren’t so plainly dishonest.
The reason firms are not investing is because there’s little or no demand for what expanded production would put on the shelves. People lack the discretionary income to absorb such an expansion. (To say nothing about lacking a job.)
Sadly, the President and his advisers missed the early opportunity, in 2009, to create deeply funded government programs putting people to work on much-needed infrastructure repairs and improvements — especially greening the infrastructure. Cornyn repeats the standard Republican cliché about the administration’s “failed stimulus program.” For him, it failed simply because it was government spending. But the real reason was that it was too small and too timid. The only thing wrong with government stimulus is that it hasn’t been tried.