Once again, Obama has chosen complexity for the sake of complexity, a lot of moving parts and social engineering.
There was, however, a solution which would have garnered unanimous Republican and moderate Democratic support:
The left-wing of the Democratic Party would have objected, but it would have been for nothing. Just extend the current tax rates and structure, across the board. Period. So that the job creators could get back to doing what they do best, creating jobs.
Instead, more drama, complexity, last minute rush, and another bill no one will have time to read or understand.
Ah, gravitas.
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I thought deficits mattered?
ReplyDeleteThey do, which is why you spend most of 2011 and whatever 2012 work you can manage addressing the structural problems.
ReplyDeleteBut the economy is sluggish NOW, and it is in part because no one knows what the tax rates are going to be in three weeks. You don't know that, you put off decisions. You don't make decisions, you stand pat. You stand pat, you don't grow. Release some of that stalemate, and the resulting economic activity just might narrow the deficit numbers naturally while you work on the structural stuff (even if it takes another election.)
Who is to say that "keep everything the same now" isn't their Plan A and the current deal is Plan B offered as a sacrifice unto the media and pundits. Burn a week or two on deal v. no deal and the time will be ripe for Plan A to be unveiled.
ReplyDeleteKeynes is dead, Tlaloc, and Art Laffer taught us that lower taxes indeed raises treasury income. Taxes do indeed have a stifling effect on economic activity. Reagan proved this so.
ReplyDeleteBesides, even if we accept your Keynesian premise that lower taxes increases deficits, I'd settle for growth over those deficits all the time.