Firedoglake: Rachel Maddow Shames White House Economist Bernstein on Obama’s Phony “Spending Freeze”

[Turborama]

By: Scarecrow Monday January 25, 2010 6:56 pm

The White House "floated" a lead balloon Monday by telling everyone that Obama’s next budget proposal, due February 1, will include a "spending freeze" on several categories of discrectionary spending. It’s a complete head fake: there’s no freeze, and all they’re doing is playing to the unrelenting stupidity of those, like Sen. Evan Bayh, who think the way to put people to work is to spend less money.

Someone please give Bayh the Washington Post’s unread copy of any economic text book on what happened during the Great Depression when FDR’s economic advisers foolishly convinced him the Depression was over and that he needed to worry about balancing the budget — or just send him http://www.nytimes.com/2010/01/04/opinion/04krugman.html">this from Krugman or http://www.youtube.com/watch?v=3yAyQV8gOjo">watch this. The result of cutting spending was to send the economy back into deep depression. Fool me once . . .

But the President’s economic and political advisers are being too clever by half; they’re not really planning anything remotely approaching a spending freeze. Most of the budget — including the military/defense, Veterans, the massive bureaucracies at Homeland Security, and lots of other stuff will be entirely exempt. The remaining items, which constitute about $447 billion out of a $2 trillion plus budget, will not be frozen either.

What the Administration will do is what all administrations do: reallocate spending priorities, increasing some items and reducing or eliminating others. And even then the net change in the aggregate budget will be about $25 billion per year, less than mere pocket change in the massive US economy.

Full piece (with Rachel's interview embedded): http://seminal.firedoglake.com/diary/26492