Ken's Project Blog

January 25, 2011

The Spending Reduction Act

Filed under: In The News,Politics — Ken @ 10:13 am

The Republican Study Committee released its Spending Reduction Act of 2011, H.R. 408, and while it most likely won’t be passed in its current form (even in the Republican-controlled House), it does layout a list of $2.5 Trillion in cuts that will at least be discussed – and that’s a start.

Sources:

Republican Study Committee Website

Republican Study Committee: RSC Spending Reduction Act – Bill Text

Republican Study Committee: RSC Spending Reduction Act – Two Page Summary

Chart from Businessinsider.com

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5 Comments »

  1. Republicans are idiots. If you reduce spending, you’re going to cause more unemployment, which in turn will reduce tax revenues and increase payouts for unemployment benefits, which will offset the savings.

    Comment by Ben Hoffman — January 25, 2011 @ 10:24 am | Reply

    • We all want private sector growth, not public sector growth, right? (bigger economy, not bigger government) By reducing government spending you leave more money in the private economy to create private sector jobs…

      By increasing government spending you prop-up union jobs (government workers, construction trades, etc.) at the expense of the non-union majority – unions represent only 7-9% of the workforce.

      Comment by Ken — January 25, 2011 @ 2:52 pm | Reply

      • That’s kind of silly, don’t you think?

        First of all, when the government spends money to build bridges and roads, they usually hire private companies to do the work. If the government didn’t spend that money, the work simply wouldn’t get done. It’s not like private companies are going to go in and build bridges and roads on their own.

        Second, private companies weren’t hiring before the stimulus was enacted, so why would they start hiring now if there’s no need for more workers? The thing is, they are hiring, just not here. Manufacturers are doing a lot of hiring where they can get cheap labor. They can get workers in China to build electronics for $6.00 a day. And don’t tell me we should allow people to work for $6.00 a day here. That’s bad for our country.

        Third, when the government creates jobs, it puts money in people’s pockets and they go out and spend that money, which stimulates the econmy.

        Comment by Ben Hoffman — January 25, 2011 @ 4:44 pm

      • No, I don’t (I wouldn’t have said it if I did ;^)

        My comment said the Gov’t is helping union laborers disproportionally – they represent construction trade (build bridges and roads, as you mentioned) and Gov’t jobs (federal and state Gov’t workers are union members).

        You mention that the Gov’t hires private firms – yes, that is true, but they only hire firms that pay “prevailing market wages,” AKA Union Labor Rates, and typically hire union shops to “keep the peace” on the construction site (since union and non-union work costs the same, why risk a union picket line?).

        Why must people’s money pass through the government only to be passed back into their pockets as part of a stimulus? Leaving money in the economy also stimulates the economy, but it’s harder for politicians to “claim responsibility” for the effect… It’s easier to talk about spending $X BN on infrastructure than to let everyone figure out they are paying less taxes, keepinig more of their money, and improving their lives.

        As for the second point you make (sorry, going out of order) – how does a better bridge over a river get private industry to hire more? Sure, it might keep a few supliers working for the life of the construction project, but there is no long-term stimulative effect for a new bridge. It simply benefits the union construction workers for the life of the project. What long-term, post-construction jobs are created by building a new bridge?

        Comment by Ken — January 25, 2011 @ 5:21 pm

      • [Why must people’s money pass through the government only to be passed back into their pockets as part of a stimulus? Leaving money in the economy also stimulates the economy, but it’s harder for politicians to “claim responsibility” for the effect… It’s easier to talk about spending $X BN on infrastructure than to let everyone figure out they are paying less taxes, keepinig more of their money, and improving their lives.]

        I assume you’re talking about tax cuts when you talk about “leaving money in the economy.” Obviously, that hasn’t worked. Taxes have never been lower. Don’t forget, Clinton raised taxes and we had massive job creation and huge surpluses of jobs that went unfilled. Bush cut taxes and we had virtually no job growth during his first four years and not all that much better during his second.

        No, tax cuts are an inefficient way to stimulate the economy.

        [As for the second point you make (sorry, going out of order) – how does a better bridge over a river get private industry to hire more?]

        First of all, our infrastructure is crumbling, so the bridges and roads need to be built anyway. Those types of projects create all sorts of jobs, from civil engineering to construction workers, to laborers. They also require a lot of equipment, such as earth movers, front end loaders, dump trucks, concrete equipment, etc… So it creates jobs in manufacturing as well as construction. All those people who now have jobs have money to spend, and they spend it, which creates more jobs in all sectors of the economy.

        Working people pay taxes, so that puts money back into the treasury and offsets the spending.

        Comment by Ben Hoffman — January 25, 2011 @ 8:02 pm


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