Schieffer carries water for GOP, mouthing myth about stimulus

››› ››› CHRISTINE SCHWEN

On Face the Nation, Bob Schieffer adopted the often repeated Republican talking point that some government spending in the recovery package currently being debated in the Senate is not stimulus. In fact, while testifying about the bill, CBO director Douglas Elmendorf said that CBO and "most economists" believe that "all of the increase in government spending ... provides some stimulative effect."

On the February 8 edition of CBS' Face the Nation, host Bob Schieffer adopted the often repeated Republican talking point that some government spending in the recovery bill currently being debated in the Senate is not stimulus. In fact, Congressional Budget Office director Douglas Elmendorf has explicitly refuted the suggestion that some of the spending provisions in the bill would not have a stimulative effect.

Schieffer said, "Senator [John] McCain makes the point that some of this is not going to stimulate the economy. And basically what he's saying -- and these are my words, not his -- is that some of this is just the pet projects the Democrats have been trying to write into law for a long, long time, and while they may be good things, they will not help get this economy going again." In fact, contrary to the "point" Schieffer said McCain made, in January 27 written testimony before the House Budget Committee, Elmendorf stated: "[I]n our estimation -- and I think the estimation of most economists -- all of the increase in government spending and all of the reduction in tax revenue provides some stimulative effect. People are put to work, receive income, spend that on something else. That puts somebody else to work."

Additionally, Center for Economic and Policy Research co-director Dean Baker wrote in a February 3 post to his American Prospect blog that "[s]pending is stimulus," and that "[a]ny spending will generate jobs." Baker later added: "Any reporter who does not understand this fact has no business reporting on the economy." From Baker's post:

Spending that is not stimulus is like cash that is not money. Spending is stimulus, spending is stimulus. Any spending will generate jobs. It is that simple. There is a question of whether the spending will go to areas that will provide benefits, long-term or short-term, to the economy, but there is no question that money that is spent will create jobs and therefore is stimulus.

Any reporter who does not understand this fact has no business reporting on the economy.

From the February 8 edition of CBS' Face the Nation:

SCHIEFFER: Senator McCain makes the point that some of this is not going to stimulate the economy. And basically what he's saying -- and these are my words, not his -- is that some of this is just the pet projects the Democrats have been trying to write into law for a long, long time, and while they may be good things, they will not help get this economy going again. How do you respond to those allegations?

SEN. KENT CONRAD (D-ND): You know, Senator Lindsey Graham [R-SC] and I offered an amendment to take out some of these things that have less stimulative effect, in favor of addressing the housing crisis, which must be addressed, because, unless we have a healthy housing market, and housing, and the fiscal situation is stabilized, we can't have recovery.

But, look, in economic terms -- in economic terms, stimulus is stimulus. If you put more money into the economy to offset this falling demand -- remember what's happening here: The economy is contracting, and consumers don't have the money to put in to offset those losses. Companies don't. The only one that does is the taxpayer of the United States. We are going to have to come forward and put up money to offset this falling demand. If we don't, we could enter a deflationary spiral that would be devastating.

Posted In
Economy
Network/Outlet
CBS
Person
Bob Schieffer
Show/Publication
Face the Nation
Stories/Interests
Economic Recovery Plan
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