Spending Is to Hot Fudge Sundae as Stimulus Is to Dessert

Media Matters‘ Jamison Foser (2/6/09) has “one fact that should be made clear in every news report about the stimulus package working its way through Congress, it is this: Government spending is stimulative“–and Foser provides evidence that, “unfortunately, many of the reporters who have shaped the stimulus debate don’t seem to understand that.” After quoting Charles Gibson of ABC telling President Obama that “a lot of people have said [his legislation is] a spending bill and not a stimulus,” Foser writes that that is “like saying, ‘This is a hot fudge sundae, not a dessert.'” Moving beyond these rudimentary economic facts, Foser looks at “another problem with Gibson’s formulation”:

in describing the stimulus as a “spending bill,” he ignores the fact that the bill contains tax cuts, too. Lots and lots of tax cuts. And those tax cuts, by the way, provide less stimulus than government spending on things like food stamps and extending unemployment benefits….

MSNBC‘s Mika Brzezinski, among others, has repeatedly suggested “welfare” provisions in the bill wouldn’t stimulate the economy. This is the exact opposite of true; those provisions are among the most stimulative things the government can possibly do. There are some fairly obvious reasons why that is true, beginning with the fact that if you give a poor person $100 in food stamps, you can be pretty sure they’re going to spend all $100 of it; but if you give a rich person $100 in tax cuts, they probably won’t spend much of it at all.

Noting that these “old politics of demonizing ‘welfare spending'” ignore “the simple truth that such spending not only helps those Americans who are struggling the most feed their families, it also does more to stimulate the economy,” Foser knows why “you probably won’t see is Mika Brzezinski or Charles Gibson or any other TV reporter suggesting that the tax cuts in the bill are not stimulative and should be stripped”: “Anchors like Charles Gibson are not going to qualify for food stamps anytime soon. But they would certainly benefit greatly from some tax cut provisions that wouldn’t do nearly as much to stimulate the economy.”

Read more about Gibson’s tenuous grasp on fiscal reality in the ‘Tax cuts are good’ section of this article from FAIR’s magazine Extra!: “Dubious Debates: How Media Moderators Lowered the Level of Election ’08” (7-8/08) by Jacqueline Bacon