The Democrats' response to Republicans who insist that tax cuts for businesses and the wealthy will prime the economy—basically a rehash of Ronald Reagan's supply-side economics argument---seems cribbed straight from NYT lefty columnist Paul Krugman.

The Krugman-inspired rejoinder: "Demand-side" economics.

I couldn't help notice that US Rep. Jim McDermott (D-WA, 7), speaking at the Northwest Progressive Institute conference this weekend, sounded like he was reading straight from a recent Krugman column, (and a follow-up editorial on the NYT Sunday editorial page).

McDermott said even though businesses posted a record high $1.25 trillion in profits in the first quarter of this year and have $1.9 trillion in the bank, they're not spending it because there's no demand from consumers. There's no demand from consumers, McDermott said, because consumers don't have jobs and money. His solution: Spend government on infrastructure projects to create jobs.

Here's Krugman:

How can anyone imagine that lack of corporate cash is what’s holding back recovery in America right now? After all, it’s widely understood that corporations are already sitting on large amounts of cash that they aren’t investing in their own businesses.

In fact, that idle cash has become a major conservative talking point, with right-wingers claiming that businesses are failing to invest because of political uncertainty. That’s almost surely false: the evidence strongly says that the real reason businesses are sitting on cash is lack of consumer demand. In any case, if corporations already have plenty of cash they’re not using, why would giving them a tax break that adds to this pile of cash do anything to accelerate recovery?

It wouldn’t, of course; claims that a corporate tax holiday would create jobs, or that ending the tax break for corporate jets would destroy jobs, are nonsense.

So here’s what you should answer to anyone defending big giveaways to corporations: Lack of corporate cash is not the problem facing America. Big business already has the money it needs to expand; what it lacks is a reason to expand with consumers still on the ropes and the government slashing spending.

What our economy needs is direct job creation by the government and mortgage-debt relief for stressed consumers. What it very much does not need is a transfer of billions of dollars to corporations that have no intention of hiring anyone except more lobbyists.

US Rep. Dennis Kucinich (D-OH), who was in town for the conference, also hit the demand-side theme:

"When the private sector doesn't provide the job opportunities and keeps shedding workers, I say our government has the moral responsibility to help people find the work and create the jobs that are necessary to build America," Kucinich said about the 14 million people who don't have a job.