Wednesday, June 16, 2010

Tea Party Vs. Liberals - Psychology Today

I respectfully disagree with Dr. Taylor's analysis that the debate between the Tea Party and Liberals is about fear or anger. I think it is about how to prop up the U.S. economy, which has been faltering. Liberals want to stimulate the economy with deficit spending, while the Tea Party wants to reduce the federal deficit to encourage private investment. Academic economists debate this issue; as far as I can tell, nobody knows for sure what is the right path. The financial markets, however, may force the adoption of the Tea Party solution. At least this is what is happening now in Europe. Liberals favor deficit spending to stimulate the economy. They embrace the theory that government must create the credit that was destroyed in the private sector. Today's editorial in the N.Y. Times calling for more stimulus to help the unemployed is a good example of the liberal position. The Tea Party believes that the best way to rebuild our economy is to restore fiscal discipline to Washington -- that is, to cut the federal deficit by reducing social programs such as welfare and pensions. They believe that when the private sector sees that Washington is pursuing sound money policies, private investment will improve, creating real jobs. The Tea Party dismisses the low-paying unskilled jobs created by "stimulus" spending as unhelpful since the jobs are temporary, the funding is borrowed, and the increased debt will have to be repaid in the future. Which policy will "win" may depend on the financial markets, not on psychological analysis...more

No comments:

Post a Comment