“When you get into a tight place and everything goes against you, till it seems as though you could not hold on a minute longer, never give up then, for that is just the place and time that the tide will turn.”
---Harriet Beecher Stowe
the Bush tax cuts did not even come close to paying for themselves. The Bush tax cuts
costus around $1.7 trillion in revenue from 2001 through 2008, in part because of weak output and job growth following the cuts (contrary to assertions about how the tax cuts would stimulate economic growth).As for the cost of extending the tax cuts to the wealthy, the Tax Policy Centerestimates
that making all the Bush tax cuts permanent, as opposed to extending them only for the middle and lower classes, would cost $680 billion over the next decade.The disappointing part is that the press still lets them get away with this. At best, the press generally says something like "some economists claim this isn't true," implying there's a debate about this issue -- that some credible economists think the tax cuts will, in fact, pay for themselves -- when there is no debate and the answer is clear. Tax cuts don't pay for themselves.
If the press won't call them on this obvious falsehood, how can we trust them on anything? Instead of reflecting poorly on the press, this ought to bring the general credibility of the people making these claims into question. The press ought to ask something like, "Are you this ignorant about economics, in which case why should anyone vote for you, or are you deliberately misleading people? I'll assume you aren't ignorant, so here's the question. If you are willing to make false claims about the revenue generated from tax cuts in order to promote them for the wealthy, what other falsehoods will you be willing to promote in order to serve political ends? If voters can't trust you to tell the truth about tax cuts, how can they trust you on anything?"
When it turned out that "post-partisanship" actually meant creating a consensus among wealthy people about how best to repair the damage of the Bush years without in any other way disturbing the status quo—well, who could blame independent voters for being disappointed?
As they face the certainty of losses, Democrats are in a sense victims of their own success after winning 55 seats and expanding far into conservative territory over the last two election cycles. Now they are trying to defy history and demographics as they struggle to hang on to the districts in a midterm election with their party in the White House.
Its not all Anti-Obama, or anti-RomneyCare. Many of the loses that Democrats will have on election day are a part of the normal systemic shifts that occur historically.
Christina Romer doesn't even bother to try to make an argument for additional fiscal intervention with an eye toward job creation. She has, apparently, given up all hope that fiscal policymakers will provide the additional help that the economy needs. Instead, she is doing her best to prevent Congress from making things worse
Indeed. With the output gap at a post-WWII high, and with current forecasts projecting no shrinkage of the output gap at all over the next year, now is a time to twiddle all of the policy knobs the government has at its disposal up to 11: federal purchases increases, tax postponements, aid to states, partial or full nationalization of mortgage finance, loan guarantees, raising inflation targets, talking down the dollar, quantitative easing--especially since the expansion of government spending to offset the fall in private demand in the recession never happened.
A few commentators will point out, with much more justice, that Mr. Obama never made a full-throated case for progressive policies, that he consistently stepped on his own message, that he was so worried about making bankers nervous that he ended up ceding populist anger to the right.
But the truth is that if the economic situation were better — if unemployment had fallen substantially over the past year — we wouldn’t be having this discussion. We would, instead, be talking about modest Democratic losses, no more than is usual in midterm elections.
The real story of this election, then, is that of an economic policy that failed to deliver. Why? Because it was greatly inadequate to the task.
When Mr. Obama took office, he inherited an economy in dire straits — more dire, it seems, than he or his top economic advisers realized. They knew that America was in the midst of a severe financial crisis. But they don’t seem to have taken on board the lesson of history, which is that major financial crises are normally followed by a protracted period of very high unemployment.
If you look back now at the economic forecast originally used to justify the Obama economic plan, what’s striking is that forecast’s optimism about the economy’s ability to heal itself. Even without their plan, Obama economists predicted, the unemployment rate would peak at 9 percent, then fall rapidly. Fiscal stimulus was needed only to mitigate the worst — as an “insurance package against catastrophic failure,” as Lawrence Summers, later the administration’s top economist, reportedly said in a memo to the president-elect.
But economies that have experienced a severe financial crisis generally don’t heal quickly. From the Panic of 1893, to the Swedish crisis of 1992, to Japan’s lost decade, financial crises have consistently been followed by long periods of economic distress. And that has been true even when, as in the case of Sweden, the government moved quickly and decisively to fix the banking system.
To avoid this fate, America needed a much stronger program than what it actually got — a modest rise in federal spending that was barely enough to offset cutbacks at the state and local level. This isn’t 20-20 hindsight: the inadequacy of the stimulus was obvious from the beginning.
• US authorities failed to investigate hundreds of reports of abuse, torture, rape and even murder by Iraqi police and soldiers whose conduct appears to be systematic and normally unpunished.
• A US helicopter gunship involved in a notorious Baghdad incident had previously killed Iraqi insurgents after they tried to surrender.
• More than 15,000 civilians died in previously unknown incidents. US and UK officials have insisted that no official record of civilian casualties exists but the logs record 66,081 non-combatant deaths out of a total of 109,000 fatalities.
In this year’s congressional midterm elections, big business in America is – for the most part – rallying for a sweeping Republican victory. Business groups, such as the US Chamber of Commerce, which is almost exclusively backing Republicans, have long argued that Barack Obama, US president, and the Democrat-controlled House and Senate are anti-business. Republicans seeking election this year, including Tea Party-backed candidates, such as Senate hopeful Rand Paul of Kentucky, are running on an agenda to cut taxes and roll back regulations.While these might be business priorities, there are questions about how friendly to business some of the Tea Party candidates will be on other issues: from education and immigration to trade and industry tax policy and subsidies. Mr Paul, for example, has denounced the Federal Reserve and has campaigned against the federal bail-out of the banking and car industries – programmes that companies largely supported.“The broad impact of the Tea Party on the Republican party is not to make it a more pro-business party,” says Vin Weber, a former Republican congressman who now works as a business lobbyist.“These are nationalists. And their views on trade are pretty much unknown. For those who believe in immigration reform, and if you will a more liberal policy, there is no good news.”
Norm Ornstein, a political scientist at the American Enterprise Institute, says that while corporate America and the Tea Party will stand together on some issues, big business could be disappointed by the ripple effects of electing politicians whose priority is limiting government sizespanspanspanspan
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