Last week, when the House was debating the stimulus bill, Marc Ambinder conducted an interview with Rep. Eric Cantor, the Republican Whip. Cantor's response (or lack thereof) to a simple question about government transfers is very telling:
[Ambinder:] Another plank in your proposal is to get rid of the tax on unemployment benefits. But in terms of a direct stimulus, increasing welfare benefits, increase food stamps, would be as much of a multiplier, if not more, than the Republican proposal? If the goal is to get a bill with as much stimulus as possible, how come Republicans aren't talking about increasing other government transfers? [Rep. Cantor:] Right now, the reality is you have growing unemployment in the country and what we've got to do is create an environment where you can sustain a certain level of activity. You're right. Unemployment benefit extension, lifting taxes on unemployment benefits is a safety net move. But there is some stimulative effect, although it's not great. It is recognition of reality.Huh? Cantor's answer is totally incoherent. Virtually every economist agrees that extending unemployment insurance and increasing food stamps have the highest multipliers of all the available fiscal tools—that is, they provide the most bang for the buck. That much is not in dispute. So why does Cantor oppose more effective policies? It has something to do with sustaining "a certain level of activity," or possibly recognizing reality. It's not entirely clear. My guess is that it has a lot to do with Eric Cantor being a narrow-minded douchebag. But that's just me.