Republicans are bailout hypocrites (letter to the editor) – SILive.com

Back in 2008, the U.S. economy was crumbling due to many homeowners not paying their mortgages on their homes, as well as that vast number of Americans filing for bankruptcy. Historians and economists call this the Great Recession, which was the worst financial crisis since the Great Depression.

Many Republicans opposed a fiscal stimulus. The most common reason was that it would grow an already large budget deficit, which would lay the foundation for the next recession. They argued the best stimulus would be to do nothing for the economy, and therefore, favored slashing government spending to reduce the impact on the budget. This same approach is exactly what FDR did in 1937, which led the recession of 1937-1938.

In 2008, Republicans denounced bailouts for private businesses that were done through TARP Troubled Asset Relief Program, which was the bailout that was designed to save the economy from the crisis that nearly brought on a second Great Depression. Although this was constructed and signed into law by President George W. Bush, Republicans blamed President Obama for any problem with this program.

Conservative economist Milton Friedman suggested that the Great Depression was the cause of the Federal Reserves mistake of allowing the money supply to drastically shrink, which created severe deflation in our economy. As a result, banks collapsed and those with deposits would lose everything in their accounts.

Friedman suggested that the Federal Reserve could have prevented this by buying up massive amounts of government bonds, which would pump cash into a deflated economy by increasing the money supply.

In 2008, Republican economist and Federal Reserve Chairman Ben Bernanke enacted the policies Friedman suggested. As a result, it was successful at preventing the banking system from collapsing, infused cash into a deflated economy, and prevented a second Great Depression.

Today, Republicans are pushing the massive $2 triilion stimulus to address the fallout from the coronavirus on the economy. A large portion of this stimulus is in the form of bailouts for large businesses and corporations, with very little, comparatively, going to the average working class American. However, Republicans said in 2008 that the TARP bailout of $700 billion was too expensive. Back in 2009, the Tea Party formed by Republicans in opposition to such bailouts, but are silent today.

Republicans have proven to be hypocrites about bailouts. You can even make the case that they have lied and changed their position when it suits them. For example, they are opposed to anything that grows the budget deficit when a Democrat is president, but largely grow the deficit when a Republican is president.

When Obama was in office, they opposed anything he did that wouldve grown the deficit, such as his $800 billion infrastructure stimulus, but favored Trumps $2 trillion tax cut and massive spending programs that are increasing the budget deficit by $1 trillion every year as far out as 2030.

(Dr. Joseph Frusci is a New Springville resident.)

Go here to see the original:

Republicans are bailout hypocrites (letter to the editor) - SILive.com