Things that aren't true

Two worthwhile columns in the NYT today, one by  the always reliable PK, the other by Steven Rattner. Let me put two and two together.

Krugman points out that contrary to Republican freakout, the Administration responded competently and effectively to the ebola outbreak, the Affordable Care Act is working just fine, the Department of Energy loan program that lost money on the Solyndra investment has in fact made an overall profit of $5 billion, and the deficit has in fact fallen sharply. In other words, government can indeed do things well.

Rattner is despairing, as economic inequality in the U.S. grows worse, and the incomes of people near the bottom are actually falling. But, it's worse here than it is in Europe. We have the lowest tax rates of the OECD countries, and the least generous social programs. Republicans constant screaming that our taxes are too high is just nonsense. And in fact, higher taxes are not associated with lower rates of growth. That's pretty simple: government spends that tax money, creating demand directly, and by giving people salaries that they in turn spend; meanwhile, wealthy people spend a much smaller portion of their income than do poor people. And they don't create jobs either. They won't invest in job creation unless they can sell stuff, and they can't do that if people don't have the money to buy it. Also, government makes essential investments that the private sector never will, because of the problems of free riders and common goods.

But the corporate media, not to mention Democratic politicians, don't seem to understand any of this. Republican claims that tax cuts stimulate the economy go unchallenged. Yes, the wrong kinds of taxes at the wrong time slow down the economy, but right now taxing the rich to invest in the present and the future would be good for economic growth, and particularly sustainable growth. Mass transit, basic research into renewable energy and conservation, creating a smart power grid, educating the children who will make our future, guaranteeing affordable health care for all -- these are all things government can and must be doing.  And anybody who says otherwise is a lunatic. Of course, they can always move to Kansas.