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.
