Faced with this prospect (triggered defense cuts), Republicans — who normally insist that the government can’t create jobs, and who have argued that lower, not higher, federal spending is the key to recovery — have rushed to oppose any cuts in military spending. Why? Because, they say, such cuts would destroy jobs.
Thus Representative Buck McKeon, Republican of California, once attacked the Obama stimulus plan because “more spending is not what California or this country needs.” But two weeks ago, writing in The Wall Street Journal, Mr. McKeon — now the chairman of the House Armed Services Committee — warned that the defense cuts that are scheduled to take place if the supercommittee fails to agree would eliminate jobs and raise the unemployment rate….
…John Maynard Keynes himself offered a partial answer 75 years ago, when he noted a curious “preference for wholly ‘wasteful’ forms of loan expenditure rather than for partly wasteful forms, which, because they are not wholly wasteful, tend to be judged on strict ‘business’ principles.” Indeed. Spend money on some useful goal, like the promotion of new energy sources, and people start screaming, “Solyndra! Waste!” Spend money on a weapons system we don’t need, and those voices are silent, because nobody expects F-22s to be a good business proposition. K-thug
Keynesian economics isn’t partisan. Government spending on a liberal agenda or a conservative one doesn’t matter as Krugman later points out, if the money is private or public, spending it still makes jobs.
One of the biggest myths in the political economy of the US is that Republicans are against government spending. More accurately, they are against spending on certain things for certain people; things rich white people don’t need. Historically, they have wanted to de-fund certain programs targeted to help poor people and the middle class like Medicare and Social Security. Modern Republicans have expanded this charming platform, to now include opposition to all services that would benefit the poor and the middle class, like public education and infrastructure.
No serious person can think the failure of a $500 million loan to Solyndra makes less sense than an $11 billion F-35 Joint Strike Fighter program (Islamic terrorists don’t have fighter jets), or giving ever increasing tax dollars to DOD is defensible by comparison when their shitty internal financial controls are one-third of cited reasons that make the GAO’s efforts to audit federal financial statements impossible. I’ll take the failure of some loans in energy over defense procurement any day. I guess this makes me a liberal, but counting defense spending as a job creator makes most everybody a Keynesian.