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David Sirota's new book, The Uprising, is
available in bookstores everywhere. |
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President elect, Barack Obama, is warning of dire
economic situation, |
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and how much worse it could get if there is not
bipartisan support, and quickly, |
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for his stimulus plan.
But will his proposals work? |
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Joining me now from Denver is nationally
syndicated columnist, David Sirota. |
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He is also the author of the book, The Uprising.
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David, you wrote a column yesterday,
fascinating one. |
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In the immediate aftermath
of the Obama speech called, |
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"The Good, The Bad and The Ugly of the Plan".
Let's walk through it. |
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What the good first?
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The good is that Obama seems to understand, at
least the size and scope of the problem, |
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and is proposing a robust package of
public spending. |
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And we know that public spending is probably the
most efficient way to stimulate the economy. |
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Some people, though, are saying that there isn't
enough public spending in this. |
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Well, it gets to the bad. The bad part of this is
that he is also including a lot of tax cuts |
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and he seems to be paying for those tax cuts
with that public spending. |
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In other words, he's taking the money that could
be going to public spending, |
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and proposing putting it into a lot of tax cuts
that a lot of people don't think are gonna work. |
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So why do you say the tax cuts are bad? Because if
you look at the other side of the political fence, |
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or on the Republican side, they believe that the
tax cuts are good |
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and there probably needs to be more of them.
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Well, because the data tells us that the best way,
the quickest way, the most efficient way, |
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to stimulate the economy,
is through public spending. |
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Mark Zandi of economy.com,
one of John McCain's advisors, |
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had said that you get about $1.58 GDP benefit
with public spending. |
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You only get $1.23 or $1.24 when you put
that money into tax cuts. |
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So, if we want to stimulate the economy in a short
term, quick kinda way, |
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the best way that we know how to do that is
through public infrastructure spending, |
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unemployment insurance, food stamps.
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We'll get to the ugly in just a second David, but
do you have enough information |
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about what's in this plan to be able to say
whether or not it would work? |
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Not yet, and that's a good point. We don't know
what the final size of the package is gonna be. |
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We don't know what percentage is gonna spending,
what precise percentage is gonna be tax cuts. |
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It's still a negotiation in process,
that's absolutely true. |
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Alright, so give us the ugly of all of this.
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Well, the ugly was that Obama seemed to mention
that he wants to connect deficit reduction |
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to entitlement, "entitlement reform."
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Now, entitlement reform refers to
social security and Medicare. |
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Now when you tie deficit reduction to entitlement
"reform", it usually has meant in the past |
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efforts to try to cut those programs. That's a
bad idea in a bad economy. |
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Medicare and social security are very, very
stimulative to the economy. |
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You do not want cut those programs.
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There was one other aspect to all of this that
John Dickerson from Slate Magazine |
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picked up, he noticed how this was
being sold. He writes, |
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"For a president who has repeatedly promised an
entirely new way of doing business in Washington, |
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Obama's address had a deep familiarity: Doom was
its central and recurring message. |
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Unless the federal government acts quickly and
boldly (and expensively), |
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the roof is going to cave in."
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It's almost like he's using the tactics
of the Bush administration. |
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As it sold security, to try to sell us economic
recovery package. |
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I think there is something to that but I don't
necessarily think that's a bad thing. |
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Every crisis is an opportunity and I think that
this economic crisis is an opportunity |
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to reassert the role of the government as a force
for good in the economy |
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on behalf of the middle class.
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We haven't had that in the last 30-35 years.
And I do think that that's a paradigm shift, |
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at least from the past couple of decades.
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David Sirota in Denver this morning.
It's good to see you David, thanks for coming in. |
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Thanks for having me John.
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