Yesterday, Presidential candidate Ron Paul published his plan to save the economy.And today, calling a spade a spade, we observed that the plan would destroy the economy, at least initially.
And this, not surprisingly, brought out the torches and pitchforks and howls of ridicule from Ron Paul fans, who were completely appalled.
- Didn’t we understand that the government spending is TOTALLY BLOATED?
- Didn’t we understand the “crowding out” theory that they teach you in Econ 101? (That government spending somehow deters private spending.)
- Didn’t we understand that the economy is already destroyed?
Um. Yes, Ron Paul fans. We understand all that.
And so we have a simple question back:
When you suddenly cut $1 trillion of spending out of a $14 trillion economy, what do you think will happen to the economy?
The economy will shrink by 7%, to $13 trillion.
And the folks whose salaries are paid by that $1 trillion–let’s call it 1.5 million of the 4.4 million people employed by the federal government–will instantly be unemployed.
So, yes, we think it’s fair to say that this would “destroy” the economy, at least in the short term.
Now, Ron Paul absolutely deserves credit for saying what expenses he would cut, unlike his lame-arse GOP candidate colleagues, who talk a big game about runaway spending but are too wimpy to actually cut anything.
And, it’s possible that, down the road, the ~1 million or so government workers that Ron Paul fired would get motivated and get great jobs and start businesses and stuff and that, eventually, this would begin to close the $1 trillion GDP gap Ron Paul created when he fired them.
But this would take time.
And given that there are already 14 million unemployed people in this country, it will probably take a lot of time.
So be honest, Ron Paul fans: Ron Paul’s economic plan would, at least initially, destroy the economy. If you still support it because you think we need to “take our medicine” and because this medicine will make us stronger in the long run, great. But don’t pretend it’s going to be all sunshine and roses.
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