Mother Jones - Comments for "Bringing Us Together"

"I think SecularAnimist is on the right track. I also read some reader comments posted on TPM (I think) that suggested two other things. One is that this is a divide and conquer strategy trying to peel off a few Repubs from their leadership, which supports SecularAnimists theory above. The other was suggesting that Obama is including his pledge to cut taxes for the middle class in the stimulus package. In this way it is a threefer..."

Another scenario is that the size of the stimulus needed is so huge that we can't hope to spend it all well. This is OK in the case of an emergency (which we're in now): you just want the injection of money as fast as possible before unemployment reaches double-digits and we risk sinking into deflation. A couple of billion in misspending are an OK price to pay for keeping us out of a Japan-like deflationary zone.

But we won't remember the urgency to get the money out 2 years from now when the stories about corruption and waste associated with the stimulus package hit the press. So Obama, strategic thinker that he is, is inviting the GOPers to sink their noses into the trough so that the stink of the future scandals will be bipartisan.

By pretending to be skeptical, they're hoping to wring yet more concessions out of Obama. Which is exactly what you'd expect them to do. It's politics.

I disagree. I think a majority of Republican voters and politicians believe in keeping the government out of the economic system, and so they honestly think the stimulus package is a bad idea. You can see this in how a great many of them eventually became very unhappy with Bush's profligate spending, even though he was their president.

As for Obana, I think he just honestly believes in bipartisanship, and so he is bending over backward to try to achieve it.

The Republicans who vote for it will have to face the ire of the Joe the Plumber vote, who threw McCain under the bus after the election. What did Joe say? McCain made him sick.

So the hope is that in 2010, the Seante Republicans up for reelection see primary challenges from the loony right who are sick and tired of these moderate nervous nellies. Sarah Palin for everything!

Self-Destruction of the Republican Party or uhm, fascism?

It's quite a gamble.

Luther, don't be an idiot. Not all government spending is stimulatory, and the economy has not been in recession for all of the last eight years.

If government spending is the answer, clearly Bush has been doing the right thing all along. LOL. Or maybe the Obmessiah has the "touch" and his expected profligacy is somehow "different"?

http://www.independent.org/newsroom/news_detail.asp?newsID=31

Under Bush, Federal Spending Increases at Fastest Rate in 30 Years

Since 2001, even with record low inflation, U.S. federal spending has increased by a massive 28.8% (19.7% in real dollars)with non-defense discretionary growth of 35.7% (25.3% in real dollars)the highest rate of federal government growth since the presidencies of Richard Nixon and Lyndon Johnson. This increase has resulted in the largest budget deficits in U.S. history, an estimated $520 billion in fiscal year 2004 alone. Furthermore, the projected spending for 2005 is a conservative estimate, since it doesn't include at least $50 billion for the 2005 cost of the Iraq occupation.

If government spending is the answer, clearly Bush has been doing the right thing all along. LOL. Or maybe the Obmessiah has the "touch" and his expected profligacy is somehow "different"?

http://www.independent.org/newsroom/news_detail.asp?newsID=31

Under Bush, Federal Spending Increases at Fastest Rate in 30 Years

Since 2001, even with record low inflation, U.S. federal spending has increased by a massive 28.8% (19.7% in real dollars)?with non-defense discretionary growth of 35.7% (25.3% in real dollars)?the highest rate of federal government growth since the presidencies of Richard Nixon and Lyndon Johnson. This increase has resulted in the largest budget deficits in U.S. history, an estimated $520 billion in fiscal year 2004 alone. Furthermore, the projected spending for 2005 is a conservative estimate, since it doesn't include at least $50 billion for the 2005 cost of the Iraq occupation.

But that's a longer term concern, to be discussed after the recovery is well underway. (Sorry for the multiple posts).

Let me also say that what I really want is for Obama to put this contradiction squarely before the American people, since after all they should decide whether we should cut spending or raise taxes.

It makes little sense that the voters punish politicians for talking about raising taxes, and punish politicians for talking about cutting spending. One of the two has to happen, and Obama could play a role in getting people to accept the need to choose, and to voice their preference.

Econobuzz, good point that lowered tax rates are hard to re-raise. But similarly, raised government spending is hard to cut.

To conservatives, the "ratchet" nature of lowering taxes is a feature, not a bug.

To liberals, the "ratchet" nature of raising spending is a feature, not a bug.

In the real world, a "temporary" tax cut is a permanent tax cut, which long outlives its temporary purpose.

In the real world, a "temporary" spending increase is a permanent spending increase, which long outlives its temporary purpose.

Pick your poison...

There are some economic advantages of tax cuts over increased spending as outlined in the white paper by the National Bureau of Economic Research

I believe the paper contends, contrary to what Keynes would say, that a "temporary" deficit-financed tax cut of a given size may increase GDP more than would an equal-sized "temporary" deficit-financed increase in government expenditures.

Let's suppose this is true; let's suppose a $400 billion government spending increase would be required to produce the same effect on GDP as a $300 billion tax cut. I would still opt for the $400 billion government spending increase, because even "temporary" tax cuts have a way of politically becoming "permanent."

That's what I don't like about Obama's policy, beyond the stimulus plan. He lowers overall revenue even after the Bush cuts expire. That makes no sense.

Exactly.

Two things are getting confused here. Whether permanent tax cuts make any sense, given the nation's needs vs. whether temporary tax cuts make sense as part of a stimulus. If the latter will inevitably or likely become permanent, they make no sense, despite their presumed efficiency in increasing GDP in the short run (as alleged in the NBER paper).

Remember Obama wasn't proposing "temporary" tax cuts for the middle class to provide a stimulus. They were to be "permanent," as a post above makes clear. They were a political stunt designed to defend against the republican attack that Obama would raise taxes.

They were a campaign promise long before we knew the financial system was collapsing -- long before we knew a huge stimulus was needed. I distinctly remember a post by Kevin complaining about the proposed cuts on policy grounds.

The tone in Washington may change for the worse if Nancy Pelosi carries through with her alleged effort to bar Republicans from offering alternative bills, amendments to Democrat bills or even the guarantee of open debate accessible by motions to recommit for any piece of legislation during the entire 111th

I think Dems have to take the lead in the original structure for bills on big issues like health care and energy. I think her adjustment of the rules on 'recommit' is good and should make things run smoother.

I'm not so sure about limiting all debate and amendments. I think that's where she needs to give everyone some room. I know a lot is worked out in closed rooms before the bills are released, but even so the politics has to be given room to air and play out.

That said, on legislation relating to our current crisis I think the time for debate has to be severely limited. Timeliness is essential, as it was for the Bush-Paulson $700B bailout.

Offering Repubs a voice doesn't mean letting them anchor Dems to the shore. It's an opportunity -- that's all.

Econobuzz,

Talking pure policy, I doubt that tax cuts would have much of a stimulative impact. That's why I agree and would like a pure spending bill.

But I do think a good case could be made for making marginal tax rates a lot more progressive by lowering taxes for the moderate income people and raising them for the wealthy. As long as it is done in a way the raises overall revenue.

That's what I don't like about Obama's policy, beyond the stimulus plan. He lowers overall revenue even after the Bush cuts expire. That makes no sense.

Tax cuts and increased spending (without off-setting tax increases) both lead to increases in deficit spending. However, as a temporary measure in difficult times such as this, tax cuts are a useful device and not inherently evil. If targeted appropriately, they can assist in reaching a desired economic goal. The positive and negative benefits can be analyzed using standard economic tools. There are some economic advantages of tax cuts over increased spending as outlined in the white paper by the National Bureau of Economic Research (a non-profit research organization) at:

http://www.nber.org/papers/w14551

Morality comes into the picture when choosing which groups benefit by the economic actions chosen, less so with the choice of tools used.

Is it possible that Obama really does want bipartisan support and he is trying to get it. But, if he does not, would he not employ his substantial rhetorical skills and public support to pillory the Republicans for pretending to want bipartisanship but when given a chance to act, they'd rather not. I think that the GOP is running a risk here if they won't participate in the process. I think he can further marginalize them.

Obama should take Cantor at his word, reduce the corporate tax breaks and say he's doing it for our children and grandchildren. (And be sure to credit Cantor for the change -- his corporate patrons will love that.)