06 January, 2009

The Tax-Cut Tango

Obama's including a megadose of tax cuts to sweeten the stimulus medicine for Cons. Paul Krugman ain't impressed:

“If we don’t act swiftly and boldly,” declared President-elect Barack Obama in his latest weekly address, “we could see a much deeper economic downturn that could lead to double-digit unemployment.” If you ask me, he was understating the case.

The fact is that recent economic numbers have been terrifying, not just in the United States but around the world. Manufacturing, in particular, is plunging everywhere. Banks aren’t lending; businesses and consumers aren’t spending. Let’s not mince words: This looks an awful lot like the beginning of a second Great Depression.

So will we “act swiftly and boldly” enough to stop that from happening? We’ll soon find out.


News reports say that Democrats hope to pass an economic plan with broad bipartisan support. Good luck with that.

In reality, the political posturing has already started, with Republican leaders setting up roadblocks to stimulus legislation while posing as the champions of careful Congressional deliberation — which is pretty rich considering their party’s behavior over the past eight years.

More broadly, after decades of declaring that government is the problem, not the solution, not to mention reviling both Keynesian economics and the New Deal, most Republicans aren’t going to accept the need for a big-spending, F.D.R.-type solution to the economic crisis.

Paul Krugman already has a Nobel Prize in Economics. If they every include a category for "Understanding Republicon Fucknuttery," he'll win a Nobel for that, too.

But Obama's trying to be all post-partisan and stuff, so 40% of his stimulus package is tax cuts. What do Cons want? You'll never guess:

However, the anti-tax crusaders at the Club for Growth believe that Obama’s proposed tax breaks don’t go far enough, and that he should drop his cuts aimed at the middle-class to focus on cutting taxes for corporations and the wealthy. From a press statement today:

The Club for Growth gives Barack Obama credit for including tax cuts in his stimulus bill, but urges the President-Elect to replace his tax credits with real, pro-growth tax cuts that will actually encourage work, investment, production, and a burst of economic growth…These include lower marginal income tax rates, lower corporate tax rates, and the elimination of the capital gains tax.

The Club for Growth closed by saying, “We urge President-Elect Barack Obama to embrace a stimulus bill that will actually live up to its name and stimulate the economy.”

However, the Club has put forth two competing assertions. It wants a bill that “actually” stimulates the economy, but the actions it proposes are the least stimulative ones that the federal government could take.

Since Cons have such a hard time with things like numbers and reality, maybe a picture from a Republican who isn't shit-scared of the truth will help (h/t):

Well, my goodness. If my skill at telling long bits from short bits isn't deceiving me, it very much looks like all the short bits belong to tax cuts. And according to this chart, the long bits are better than short bits. Put it this way: if someone told you that you could spend a dollar and either get $1.73 back or get 30 cents back, would you plump for the buck-seventy-three or the three dimes?

I'm sure that math is a little too complicated for most Cons. Let me try to simplify. You* can give me this:

And get back either this:

Or this:



Thank you.

*I am well aware that Cons are not seeing this in terms of what is best for the country, but what is best for their own pockets, hence the inane demand to dispense with tax cuts for the middle class (who will pump money back into the economy) and instead cut taxes yet fucking again for the corporations (who will take the money, shut down operations in the United States, and invest in cheap labor overseas). I would like to remind these people of one simple thing: when the middle class can no longer afford to buy your crap, you will no longer have to be worried about the corporate tax rate because you will be out of business. Just ask Sharper Image, Polaroid, VeraSun Energy Corp., and these other guys. Among many others.

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