Larry Summers is daring suggest that failing to extend unemployment along with giving more tax cuts to the rich would bring on a double-dip recession. I say giving the tax cuts to the rich in the first place were why we had the first dip, and doing it again would be absolute folly.
All of this is fueled, of course, by the fact that the Obama White House cut a deal with the GOP at a time when the Democrats in Congress were doing just fine dealing with the problems of the day. As noted here last week, the Democrats passed a tax-cut for the middle class without the tax cut for the rich. The machinations of the Senate may have made such a feat harder there. But the fact is, no deal was necessary.
So let's figure what would happen if votes were held to extend unemployment and tax cuts for the rich, but through the use of the filibuster and other legislative shenanigans, nothing became law? Then the GOP would get the credit for blocking any stimulus effort.
Then come January, the House would turn red, the GOP Senate minority would grow, and the public would know full-well that any problems legislatively would be coming from the right, not the left.
Instead, with a lame-duck session in which Barack Obama will enjoy majority control of both chambers for the last time in his first term if not his entire presidency, he has capitulated when no such action was warranted. Want the GOP agenda forwarded so badly? Wait until Congress convenes next year. They will screw this economy good then. Just wait.
My point is, any double-dip in the recession which results from poor decisions in Washington will be on the shoulders of the GOP. Frankly, I don't think an economic recovery is nearly as dependent on Washington right now as many in the Beltway would have us think. So I don't think the political risk that comes with good policy, especially a risk taken two years before the next federal election, is too great.
But an extension of such deplorable policy as zeroing the estate tax even while tax increases take place for the poorest taxpayers would do tremendous structural damage long-term for an already broken American economy.
Obama came in with a plan to fundamentally change the financial system in America so it longer punished the middle-class to benefit the rich. But since taking office, he has moved closer to Wall Street and further from America.
Democrats should save the White House from its own madness. Our House members and Senators need to reject this deal. If that means unemployment extensions have to wait until January, so be it. Let's see how serious Republicans are then about saving this economy once they have to govern instead of choosing to obstruct.
So, who will run against Obama in the primary? Probably not Hillary. Bloomberg, perhaps, if he decides he is a Democrat.
ReplyDeleteI may be less pissed in a year, but this isn't leadership. I'd be perfectly happy to back a new, centrist party, as long as it was more than a man on a white horse.
And that has always been the problem with Perot movements or Nader moments. That may be why a primary challenge is more likely.
ReplyDeleteI'm cautious about sounding like I'm completely ready to give up on Obama, but I am close, and with an election less than two years away any conversations which should be had must be had soon.
I realize Hillary won't run, though she has a base out there. Bloomberg would be very interesting, but if he joined the Democratic Party now he would have to defend his party loyalty. I could see someone like Howard Dean or Wesley Clark coming onto the scene strong, and frankly it was clear in 08 that there was tension between Obama and Dean.
And since this is a Florida blog, I might even suggest Alan Grayson, though he would only serve to whip Obama into shape, and likely wouldn't be so hot as a general election candidate just because he lost the last election so badly. At least he would scare the bezeesus out of Obama for fear of losing the Florida vote though.
We may also have a strong player out there like a Chris Coons who is coming off a once-unlikely Senate win, much like a certain gentleman from Illinois six years ago.
But what we would need in a primary challenge is a strong voice that shows the grit to steer the country back in the right direction. Right now, we don't have that. And I'd hate the tea party crowd to offer the only such platform in 2012.
The difference between Democrats and Republicans in a nutshell
ReplyDeleteDemocrats believe that every dime you earn belongs to the government and they generously allow you to keep some portion of it
Republicans believe that every dime you earn belongs to YOU and that while government can lay claim to some of it, they must justify every cent they take.
Libertarians believe that while taxes are inevitable, that they must be reasonable and equitable. If I make $1,000,000 per year and the tax rate is 25%, then the government gets $250,000. If I make $100,000 per year the government will get $25,000. That is fair. Attempts to make tax rates either "regressive" or "progressive" both represent screwjobs on some portion of the electorate. I personally wuld support a flat tax, but better still would be to abolish all income taxes, city, state and federal, and go with VAT assessments along the stream of commerce.
I get tired of so-called progressives screaming about a tax cut for the "rich". It is no such thing - it simply leaves existing tax structures in place.
If there is a challenge to Obama I would like to see it come from the right (which in Democratic party terms means a challenge from the center). Obama could easily fend off the sort of lockstep challenge he would receive from the left - it would be much more interesting to watch him fend off an attack from the center
Careful what you wish for, pwd. A challenge from the center in the primary likely means Obama will move hard left. I have a feeling I'd be happier with that outcome than you would
ReplyDeleteBut I take issue with the "existing tax structure." If Congress does nothing and leaves the tax code the way it is, all the Bush tax cuts will expire this year. The elimination of the estate tax wasn't there a year ago, and it is set to expire at the end of this year. That is how the GOP programmed its tax cuts, to expire after a decade.
Exactly - to not renew the cuts would represent the tax increase.
ReplyDeleteI think if Obama were forced to the left, he might win re-nomination, but wouldn't win re-election.
I am opposed to estate taxes (or more properly, death taxes). All that money has already been taxed to death (pun intended) en route to being included in the estate
NO!!! Doing nothing is doing nothing. It isn't raising anything! The estate tax is not a death tax because it not charged to everybody who dies. That is pure spin, and certainly isn't more proper.
ReplyDeleteIt was terrible policy to ever eliminate the tax, and to set up a one-year-window (a Libertarian candidate for Congress once called that the kill-your-daddy tax exemption) was really immoral.
The Democrats are not raising taxes. In fact, they voted last week to cut taxes for every American (including the top 2 percent) by extending the Bush tax cuts for the middle class. You say it is loaded language to call the GOP proposed cuts and those in the Obama deal as tax cuts for the rich, but do you pay them? Do I pay them? Do 98 percent of Americans pay them? The GOP just won an election preaching about the great need to reduce government and control deficits, and the first they want to do in D.C. is give away billions if dollars to people who already have billions of dollars.
"NO!!! Doing nothing is doing nothing. It isn't raising anything! The estate tax is not a death tax because it not charged to everybody who dies. That is pure spin, and certainly isn't more proper."
ReplyDeleteC'mon Jake - even you can't believe that twaddle I just quoted from you. No one should pay an estate tax - that money has already been taxed by whomever earned it. The one year window is wrong, it invites monkey business, but to eliminate it entirely is both moral and necessary and good fiscal policy
As for other taxes, I think the tax rate should be the same for everybody , although I am okay with exempting a base amount of $25K or so from taxation so lower earners can survive. If we simplified the tax code down to a flat tax, then if I make more money I will pay more money to the giverment.
Ugh. I don't think we will get anywhere on the estate tax.
ReplyDeleteAs for a flat tax, I would love that so long as one could be created which was equitable. That has always been the problem. Does anyone recall when Steve Forbes unrolled his "fair" flat tax, and then it turned out that he would owe nothing under that tax because it didn't tax income from investments.
Show me a flat tax which includes all types of income in the calculation, and maybe I would get on board.