Tim Pawlenty What Happened?

Tim Pawlenty went from being dull to being crazy overnight. Gov. Pawlenty has introduced his economic plan and it makes the Ryan plan look reasonable. He would change Medicare immediately, he would eliminate capital gains taxes, he would lower the top tax rate to 25%, he would deregulate business more, and he would privatize all functions of government except the military. The theory is that if the wealthy just had more money they would finally create jobs. His plan would cost $7.8 trillion dollars over 10 years. This plan does nothing to increase demand for goods or spending which is what drives this economy. The rich cannot possibly spend enough of their money to keep the economy afloat. Until we get more money into the hands of more people this economy will stagnate.

Balanced Budget Amendment

The Wisconsin Senate debate tonight broke down to taxes and spending.  Ron Johnson expressed his support for a balanced budget amendment.  This is the sound bite answer to spending.  The problem with a balanced budget amendment is what happens in times of crisis?  If you follow Keynes he stated that in good economic times governments should run a surplus and in bad economic times or times of crisis governments should not only spend the surplus but should also be prepared to run a deficit.  I know that this is pretty complex for tea baggers to grasp.  Let's take the recent time.  The year is 2001 and George Bush just returned the Clinton surplus to the people.  Then some crazy Saudis attacked the country and we went to war first in Afghanistan and then Iraq.  With a balanced budget no war with Afghanistan (because the war was not budgeted).  Of course, both of these wars were run outside of the budget until 2006 when Congress put the costs into the budget which blew up the budget.  So no wars, what about other crisis?  In 2007, 2008 we stabilized the financial markets by deficit spending.  So, we let the financial markets collapse taking down everything.  At that point there is probably no longer a need for government.  Instead of amending the Constitution we need responsible legislators.

On a side note Russ Feingold can talk about what he would do, but the reality is that his proposals will not see the light of day because the Republicans will filibuster or place holds on the bills.