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Liveblogging World War II: December 1, 1940

Diane Lim Rogers Applies the Soft Bigotry of Low Expectations to the U.S. Congress

DLM is, of course, 100% correct: » Blog Archive » Can We Do the Non-Crazy Thing with the Bush Tax Cuts?: I am no longer going to try to talk people into seeing that the “right” thing to do with the Bush tax cuts would be to let them all expire.  (The even “righter” thing would have been to never have enacted them in the first place.)  I am just going to urge the policymakers to avoid doing something with the Bush tax cuts that seems totally contradictory to the fiscal policy goals–both shorter-term and longer-term–that they claim to have....

What a juxtaposition to have President Obama’s deficit-reduction commission release its final report while the Administration “negotiates” with Congress on whether all of the Bush tax cuts, or just most of them, should be permanently extended (and deficit financed).... [T]he permanent extension of “just” the “middle-class” Bush tax cuts, as President Obama has proposed, would add about $2.2 trillion to the debt over the next ten years–without interest costs and without the associated extension of Alternative Minimum Tax relief....  Extending the upper bracket cuts along with the rest would raise the ten-year cost to close to $3 trillion.... So the Administration and Congress are debating over whether we should commit to over $2 trillion, versus closer to $3 trillion, in deficit-financed Bush tax cuts.

Meanwhile, the President’s fiscal commission has recommended that federal revenues be increased as part of a package of policy changes that would get deficits down to economically sustainable levels by 2015 and beyond.... [T]he central message on tax policy from all of the various commissions, task forces, and study groups that have reported recently is pretty simple:  beyond the next couple years, we need more revenue, not less.

That’s why I think it’s crazy to be arguing about which portions of the Bush tax cuts should be permanently extended.  The first-best debate should be over whether to extend any of them at all, because whether it comes to our short-term tax policy needs (stimulate demand in the economy) or our longer-term tax policy needs (raise more adequate revenue in pro-growth ways), the Bush tax cuts are far from the best (even tax) policy to address those needs....

I think most Americans who are paying attention to today’s fiscal policy news are probably shaking their heads and/or cussing and/or laughing in a dark-humor sort of way.  It seems both ridiculous and tragic that our leaders can proclaim their intent to get our fiscal house in order out of one side of their mouths, while arguing to keep (forever) their favorite piece of the fiscally-reckless and economically-ineffective Bush tax cuts out the other.... So I make one open wish today... that policymakers could consider doing at least the “non-crazy” thing with the Bush tax cuts and stop proposing that any of them be permanently extended...

Obama should veto any extensions of the Bush tax cuts, and press for a short-term stimulus that has a reasonable bang-for-buck ratio.