Some folks still think that we should have never cut taxes back in 1981. Like Mark Weisbrodt of the Center for Economic and Policy Research, a left-of-center thinktank:
To arrest this downward spiral, the Obama team is talking about an economic stimulus package of about $800 billion over two years. Some are complaining that this is too much. But it is actually not so large considering the size of the problem we are facing. It is about 2.7 percent of GDP. The recent increase in military spending plus tax cuts for the rich - compared to 2001 levels -- adds up to about the same.
Even if we take into account the rest of our red ink, and we actually hit the dreaded "trillion-dollar deficit" in 2009, how extreme would this be? A trillion-dollar deficit would be about 6.7 percent of GDP. In 1983, coming out of our last deep recession, President Reagan ran a deficit of 6 percent of GDP.
And the current recession could easily be worse than that one. We really don't know where the bottom is yet. The Obama stimulus also differs from the deficit spending that we accumulated in the Bush (or Reagan) years in a profound way. Tax cuts for the rich - and much more horrifically in the case of spending on the Iraq war - are unnecessary and socially destructive. By contrast, President Obama is proposing to spend money on things that we actually need.
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