My first point is why would Republicans expend all that energy if they thought (if their opinion) was that the economy would remain weak under stimulus? Clearly they believe (their opinion is) that stimuli will work and for them to succeed they must obstruct it.
This 'contrarian' school of thought is the same supply side bull that's been reheated. It implies that we do not need further stimulus and holds up an assumption that people are sitting on piles of money under their mattresses.
Well the rental market is strong because no one is buying real estate. No one has the money to buy real estate or cars. You can't have demand with no money supply.
I believe (my opinion is) that without further stimulus of some sort, the economy will continue it's lackluster growth for while, possibly a decade judging on what happened to Japan. The contrary vision is Krugman's, not Smith's. Smith's arguments are republican retreads he's attempting to pass off as new tires.
Smith holds up the following as evidence:
[div class='excerpt']“Watching the rents rise, watching the used car prices rise, I thought at some point this is going to catch — it’s going to be a self-reinforcing cycle,” Smith said. “Eventually any recession is going to end from this very effect. Once things get old enough people are going to go out and buy new stuff.”
Rents rising and used car prices rising means no one has money to buy housing. No one has money to buy new cars. This is not evidence of a growing economy, it's evidence of stagnation at best. It's effectively a back door argument against a stimulus. No stimulus would benefit the 1%. A stagnant economy for prolonged periods means that the deficit will remain high, which will ultimately lead to austerity measures, which in turn benefits the 1% more.
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