Then today came. President Obama announced his big economic idea for the State of the Union was to be an across the board spending freeze for all non defense spending. In other words: all the money spent that benefits us. We'll not dwell on the fact that Obama ridiculed this idea as not serious when John McCain said it. Instead we'll dwell on the fact that it's just cheap political theatrics and a terrible economic idea that will contribute to weakening the economy further. Because my beard isn't as great and the Nobel committee doesn't want to recognize my economic work, I'll let Paul Krugman explain.
A spending freeze? That’s the brilliant response of the Obama team to their first serious political setback? It’s appalling on every level.Tell us how you really feel, Paul. I forgot to mention he also calls the idea "pure disaster". But hey, looking tough on the deficit, whether or not it shorts the GDP gap that government spending has to make up in order to get us out of this recession, is really really important. More important than making sure the economy is fixed.
It’s bad economics, depressing demand when the economy is still suffering from mass unemployment. Jonathan Zasloff writes that Obama seems to have decided to fire Tim Geithner and replace him with “the rotting corpse of Andrew Mellon”
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It’s bad long-run fiscal policy, shifting attention away from the essential need to reform health care and focusing on small change instead. And it’s a betrayal of everything Obama’s supporters thought they were working for.
Of course, a spending freeze isn't even that good a policy if you're looking to cut the deficit. A spending freeze on non-defense spending is almost useless. It's what someone does when they want to look like they're serious and pretend they're cutting the deficit. Looking serious combined with pretend action? Sounds familiar. At least they're combining it with something that will be politically popular and economically terrible.
So, on the bad side, it doesn't look like we're going to get a handle on that economy thing anytime soon. On the other hand, we are going to get a lot of cheap political pandering. If something makes the economy worse, is panned by most economists as a bad idea, but sounds good to Republican lawmakers, and gets the political media all in a Twitter over your decisive action on the deficit, who really loses? Sure, the American people will lose. But Barry needs some good political coverage. We need to take one for the team.
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