What Would Have Happened if John McCain Won the Election?

Filed in National by on February 22, 2012

If John McCain had won, and he had sticked to current Republican austerity dogma and done nothing to rescue or stimulate the economy in early 2009, what would have happened? We don’t have to guess. Because the conservative governments of Germany, France, the U.K. and elsewhere in Europe have provided us with our parallel universe:

Last week the European Commission confirmed what everyone suspected: the economies it surveys are shrinking, not growing. It’s not an official recession yet, but the only real question is how deep the downturn will be.

And this downturn is hitting nations that have never recovered from the last recession. For all America’s troubles, its gross domestic product has finally surpassed its pre-crisis peak; Europe’s has not. And some nations are suffering Great Depression-level pain: Greece and Ireland have had double-digit declines in output, Spain has 23 percent unemployment, Britain’s slump has now gone on longer than its slump in the 1930s.

Worse yet, European leaders — and quite a few influential players here — are still wedded to the economic doctrine responsible for this disaster.

For things didn’t have to be this bad. Greece would have been in deep trouble no matter what policy decisions were taken, and the same is true, to a lesser extent, of other nations around Europe’s periphery. But matters were made far worse than necessary by the way Europe’s leaders, and more broadly its policy elite, substituted moralizing for analysis, fantasies for the lessons of history.

Specifically, in early 2010 austerity economics — the insistence that governments should slash spending even in the face of high unemployment — became all the rage in European capitals. The doctrine asserted that the direct negative effects of spending cuts on employment would be offset by changes in “confidence,” that savage spending cuts would lead to a surge in consumer and business spending, while nations failing to make such cuts would see capital flight and soaring interest rates. If this sounds to you like something Herbert Hoover might have said, you’re right: It does and he did.

Now the results are in — and they’re exactly what three generations’ worth of economic analysis and all the lessons of history should have told you would happen. The confidence fairy has failed to show up: none of the countries slashing spending have seen the predicted private-sector surge. Instead, the depressing effects of fiscal austerity have been reinforced by falling private spending.

McCain’s likely prescription would have been more tax cuts, but I don’t see how he gets that through a Democratic Congress without stimulus, and I don’t see McCain agreeing to it, as he would have a revolt on his right. So the likely event would be: Congress does nothing. The deficit would actually then become more of a problem because without the stimulus, the economy goes into a depression, depriving the federal government of even more revenue, while many more services would be required. And then the Deficit Austerity Hawks would start crying and screaming.

The one good thing about this parallel universe: I don’t see a GOP House getting elected in 2010. So that would prevent massive austerity. But without the stimulus, we are in a Depression. And it is likely that McCain would be so unpopular that he wouldn’t run again, so that would set up a Hillary v. Palin matchup in the general.

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  1. Jason330 says:

    This quote explains the modern GOP in a nutshell:

    “But matters were made far worse than necessary by the way Europe’s leaders, and more broadly its policy elite, substituted moralizing for analysis, fantasies for the lessons of history.”

    Republicans seem to believe that we are in a period that is outside of and above mere facts. A stage of history that has little need for reason, logic and even science.

    It is all magical thinking and clapping harder. If McCain was elected who doubts that national “days of prayer” would have been employed to fix the economy?

  2. Jason330 says:

    And by the way, it isn’t just Republicans who buys into the magical trickle down unicorn juice being peddled by the debt hawks. Tom Carper, and even our popular Governor are enthralled with the absurd notion that lowering taxes on the wealthy while cutting the social safety net will create a magical consumer confidence boom.

    They buy into it, but it isn’t the bedrock of their faith.

  3. puck says:

    And remember, Obama did in fact implement McCain’s 2008 tax plan, by extending all the Bush tax cuts in 2010.

    Who knows what McCain would have done with the 2010 extension.

    After all, McCain voted against those same tax cuts in 2001, then campaigned for them in 2008.

    Whereas Obama campaigned against the Bush tax cuts, then signed them in 2010.

    Democratic votes put the Bush tax cuts over the top in 2001 and 2010.

    It’s a topsy-turvy world where you can’t trust anyone on taxes.

  4. socialistic ben says:

    Forget all that. we’d be in Lybia on the ground, already on the ground in Iran and Syria…. every straight man (and Matt Bomer type gay) under 30 would be drafted. America wouldnt be making ANY cars, and Glen Beck would be govorner general of province 13. (im excited for the Hunger Games)

  5. anon says:

    Forget all that.

    That is exactly what they want you to do.

  6. bamboozer says:

    You Forgot War!!!! We’d be fighting in Iran, still fighting in Iraq and have our eyes on a dozen other places for some way cool war. McCain remains the great War Lover and at this point he and Lindsay Graham are doing all they can to start trouble in Iran.