Dems to Extend Bush’s Middle Class Tax Cuts

So the Demos are willing to endure a couple of trillion dollars of additional deficit in order to outflank the Repubs on tax cuts. Meanwhile, the expectation is that the Repubs will offer up even more deficit in the form of even more tax cuts, giving the rich the same break the middle class is getting — and all so that a few dozen small business owners, whose income actually does fall into the “rich” category, will have a few more dollars in the bank with which to hire a few unemployed people if they happen to be in the mood.
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Meanwhile, to those who complain about all those trillions added to the national debt, both will parties answer that they’ll pay for it with spending cuts — as if they couldn’t have cut spending at any time in the last dozen or so years, as if spending cuts are as easy to enact as tax cuts.
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We need a psychiatrist to pronounce both political parties clinically insane. (And how will the Tea Partiers react when they realize that it’s the Repubs who want to increase the deficit the most?)

The questions are: will Republicans protest at a) such huge amounts of deficit spending, and/or b) extending the middle class cuts without those for the top two tiers?
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Wow. Why are the questions never it seems about are tax cuts for anyone right now a good idea? Are there any ideas out there other than tax cuts?
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The rest is the demos argue this and the repubs argue that. Which is a more valid argument? There is no way to know.

Remember how important the OMB was to the health care debate and how various facets of the HCR bill were delayed to mitigate its effect on the 10 year window. Well this is just a reminder that the Republicans already knew how to play the game ten years back when they pushed their own ‘reconciliation bill’ through. I still can’t get over how everybody’s choosing to call a lack of income an ‘expense’.
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If it help remind people that neither party gives a rat’s a$$ about deficits though, it might wake people up for the need for shared sacrifice. (Fat chance….)

yes, we do.
It’s time to work aggressively for the interest of Nation,
not just for top 2%,
who already do not know what to do with all the money they accumulated,
except to abuse entire Nation with their gambling.
Enough.
Period.

I think its idiotic to let these tax cuts continue… but I see the political motivator. If they don’t do it, then Republicans say Democrats “raised taxes,” and they will anyway, they’ll just leave the rich out of it. The dems might as well just let them expire.

As far as our deflationary economy goes, I still believe that at this point its up to industry to lead the way and pull us out of it. They do have buying power on a level the average consumer does not, and they are not exercising it. And most do have the money to bring on a couple more workers, which turns into thousands if they all do it and then there is more money going around and back into their pockets.

As far as the deficit goes, the responsible thing to do is return to a budgetary surplus, which means ending our wars and reducing spending where possible (mostly defense), raising taxes after the economy can handle it, in a way that guarantees corporations are paying the heavier burden rather than their consumers who will give them profits if they can buy anyway. When we are back in the green on a yearly basis, then paying off the debt rather than cutting taxes will lead to a stronger $ all around and more happiness for all of us. But it means tightening our belts, and heaven forbid, not getting everything you wanted for the next couple decades.

Thanks for the memories, Mr. Bush.

http://michaelfury.wordpress.com/2010/02/08/a-naming-of-parts/

“Republicans argue that letting the top cuts lapse will hurt small businesses — the engine of job growth — at exactly the wrong time. Dems argue back that very few small businesses make more than $200,000 a year. ”
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Is it really so hard to check that? This is a question of fact. It makes absolutely zero sense to make this claim into a he said/she said argument.
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The he said/she said argument is why does it matter how big a firm is when the owner is making more than $200,000? Why should small business people get special treatment when they make a lot of money?
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I’m not sure how tax cuts will prevent a double dip since they normally don’t provide short-term stimulus and the economy is supposedly going back into recession right now. In fact, it is questionable if tax cuts provide any long-term benefit. Under Bush, whose party only has one economic policy, tax cuts, that they apply no matter what the context, the tax cuts fell well short of the effect they were supposed to create, employment. Job creation was stagnant under the entire Bush regime. When he left the economy was losing 700,000 jobs per month. The only thing Bush’s tax cuts have contributed to, it appears, are the size of the deficit.

Politically intelligent. I can see the advertisements now: “Republicans blocked unemployment benefits, claiming the country couldn’t afford it, then sought tax cuts for millionaires! Whose side are they on?”
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Financially moronic though. If the Republicans had any intellectual honesty on it, they’d oppose the whole thing and demand that they let them expire, or offset them in the budget. That isn’t likely.
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And same for Democrats. If they stuck to what they believe rather than playing politics, they’d let them expire.

In 2008, when Bush sent out stimulus checks to Americans, by putting money back into the economy it would stimulate spending, bolstering the economy! Nobody yelled “socialism” and economically it was the right thing to do! Now since Obama has been in office,any money spent is called “socialism”, “no” has been the republican answer to most programs.Republicans crying we can’t afford it after they ran up the biggest debt ever ,11 trillion dollars! America needs a third party, the republicans don’t want to spend a dime on unemployment benefits, any program that might enhance the economy, so its so broken they can fix it! And regain political power at any cost to the economy! Pulling out of two wars which are sapping our treasure and lives, starting projects to repair Americas infrastructure, is the only hope to reduce debt and stimulate economy! Along with getting rid of those tax breaks for the rich, use the money to start shovel ready projects! Waiting for the rich to sink money into the economy, you might as well head to “pottersville”

You should really check the definition of the word “spending.” If I owned a store and and decided to charge a dollar less than usual for an item, would you say that I was spending? And, in this case, the item has been at this price for the past ten years, so it’s really not even being lowered “less than usual.”

Seriously, in what universe and by what dictionary’s definition is this called “spending?”

‘Spending’ is the Republican friendly framing. Even when JNS is reporting factually she does occasionally lapse into odd word choices…….

Jayackroyd, to JNS’ credit, she dispelled some of that he-said-she-said when she linked to an earlier post of her’s (at the “hurt small business” link):
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(T)here are many “small businesses” who make a LOT of money (remember, Tiger Wood’s Woods falls into this category). Small businesses are generally considered three groups: sole proprietors (schedule C), sub chapter S and partnerships. Most people think of partnerships are mom and pop running a soda shop. But in America, partnerships also include private equity groups and hedge funds…
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In 2006 only 2.6 million households filed tax returns in the highest two brackets taxed at 33% and 35%… It is irrefutable that in terms of sheers numbers only a few hundred thousand of the 23 million small businesses make more than $250,000 a year – and those few hundred thousand make the bulk of profits earned by “small businesses” last year… (T)here’s huge income disparity among small businesses as there is among all Americans. Yes, two-thirds of small business income would see a tax hike… but the vast, vast majority of those few hundred thousand hedge fund magnets and golf stars can afford it…
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(note, the post was writen in ’08 and refers to Obama’s plan to increase income tax above $250K)

Couldn’t any of our elected call for a temporary hold on weapons R+D and new weapon production (only make replacement parts and munitions)? Conceivably, this could save us in excess of $200 billion per year.

I love how this is forcing the Republicans do to something they have not done in years: make sense.

In recessions you need to selectively increase government spending to stimulate the economy with few places easy to cut.

During wartime, the longest war in US history, also, even fewer places are available to cut.

Evacuating our troops would be a political, military and diplomatic nightmare which nobody should put on the table.

So, one must either increase the deficit or tax the people who spend the lowest percent of their income: the highest wage earners.

Why tax those least likely to spend their money?

Because we need people to spend, spend, spend their own money to bring back the economy.

So, Republicans have to decide if they are anti-deficit or anti-tax (for the wealthiest) and can not mathematically be both.

Besides that this is a loose-loose situation for anti-tax and anti-deficit Republicans, it will force them to change their never never land rhetoric about both being anti-tax and anti-deficit and, give Democrats, to some degree, more reasonable opposition to negotiate with in the future.

This may further erode Republican victories in November if they either back peddle on anti-deficit or if they back peddle on being anti-tax.

How far away from very simple mathematical reality are the Republicans if they think that they can spend at wartime budget, help the economy by maintaining or increasing spending and keep taxes low while not borrowing?

If Republicans were dealing with reality, they might be tolerable to deal with overall.

i’m surprised you would favor that. thats the opposite of stimulus. you’re not a keynesian?

“i’m surprised you would favor that. thats the opposite of stimulus. you’re not a keynesian?”
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I can’t speak for anybody else, but, some spending is more effective than others.
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Many forms of public works give out relatively small sums ($20k to $50k per year) to large numbers of people while some high tech weapons manufacturing and design gives larger sums to much smaller groups of people (like, $70k and up for R&D).
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Hence, the economy will do better with, say, 300k previously unemployed people spending a huge majority of their $30,000 per year (and little on material) than 90k people making $100,000 per year with a far larger portion spent on material and things outside of labor.
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This is, also, why it makes sense to add on $30,000 per year jobs for particular kinds of labor intensive public works than it does to have the same number of households with a gross income of $300k getting $30k tax break.
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Outside of Econ, and not my own specialty at all, some weapons systems are far more useful to troops on the ground than others. Some are invaluable and some just go to waste since they are too impractical to use.

One example of wasteful R&D for military goods is “Star Wars” defense system which seeks to shoot a missile mid air with another missile.
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With the very earliest research going back to the 1940s, it seems reasonably clear that getting a missile to accurately shoot down a missile with near 100% accuracy isn’t far easier than somebody with a gun shooting an enemy’s bullets out of the air by shooting right on time.

BUT I THOUGHT THE BUSH TAX CUTS WERE ONLY FOR THOSE RICH FAT CATS!

My understanding Patrick was that initially the Star Wars thing was more a ploy against the Russians (rather than feasibility), in that because the American government knew the Soviets would have to try to keep up with this and with them already at the edge financially, this would be an attempt to push them over it.
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People mock SDI routinely but it was no laughing matter to the Soviets.

If the Democrats propose doing this, in full knowledge of the financial straits that this country is currently in, with their sole purpose being to try and keep their seats in Congress, then I believe that the time has come for the American people to rise up, as a nation, and demand the recall of every single one of them. And if the President goes along with them, then he should be thrown out also.

I fully realize that there are going to be those who will immediately say that I am nuts, that there is no Constitutional provision for doing such a thing. To them I say it is time that this nation has a peaceful revolution.

I wish someone could develop a website for me that would allow me to spread this idea and see if there is grassroots support for such an idea. It is obvious that our politicians, on both sides, care not one whit for what is really good for our country. All they care about is being re-elected, and seeing how much money they can stuff in their pockets, or see how much favor they can curry so that they can have a 7 figure job after they are thrown out of office, or “retire”.

I apologize for my rants. At 61, I usually try and keep my temper under control, but this idea really burns my backside.

“America needs a third party”
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Yes, it does, but thanks to ridiculous campaign finance laws and regulations that cannot happen.

Thank you patrick, your 11.2 was a good answer for me per swissarmy’s inquiry. And pls know swiss, when I wrote the other day that the government’s inefficiency wrt intelligence gathering provided jobs and was the “Keynesian ditch”, it was heavy with snark. I do agree that Federal ditch-digging will help the economy and provide jobs, but I’ve always taken that to imply that as any federal spending on jobs will spark the economy, why not chose a productive vehicle? (eg. hire workers to repair roads and bridges). So yes, some spending is more effective than others. Further, national defense is too important to be burdened with other considerations.
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My personal belief is that we should not rely on Fed spending for jobs, the private sector is better suited. But it is, however, a good corrective measure when the economy is faltering (such as now).
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Per missile defense, I agree with apollyon07 that it was an effective ploy against the Russians. But that time has passed. Bush then, Obama now is making a terrible mistake to even consider them (Obama is talking about one in Europe). I linked to this article the other day regarding another topic, but it is relevant here:
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Despite what Secretary Gates says, the Navy’s shooting down of a crippled spy satellite with an SM-3 surface-to-air missile in February 2008 did not prove we are able to knock down ballistic missiles. According to physicist Richard L. Garwin, intercepting a low-orbit satellite is like “shooting ducks in a pond.” Bagging a ballistic missile is a different matter. Garwin, whose defense-technology credentials include former membership on the President’s Science Advisory Committee and the Defense Science Board, says, “Protecting the United States against attack by nuclear weapons or biological weapons is a failure and will remain so for the foreseeable future, so long as [we attempt] to carry it out by mid-course intercept.” Intercepting an object on a ballistic arc is more challenging than hitting one on an orbital trajectory, but the main problem is that our interceptor missiles can’t defeat the decoy countermeasures any ballistic missile employed against us is likely to have, and Garwin says they will never be able to.
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Again, please read:
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Sticker Shock and Awe

“My understanding Patrick was that initially the Star Wars thing was more a ploy against the Russians (rather than feasibility), in that because the American government knew the Soviets would have to try to keep up with this and with them already at the edge financially, this would be an attempt to push them over it.
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People mock SDI routinely but it was no laughing matter to the Soviets.”
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That includes two common misunderstandings.
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Your second point “People mock SDI routinely but it was no laughing matter to the Soviets.” is easiest to address.
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The Soviets had already, more than ten years before Reagan became president in 1971 sunk a fortune into R&D for a defense system which could only succeed in defending the city of Moscow.
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The A-35 anti-ballistic missile system, or A-35 Aldan, was a Soviet military battle management radar compl”ex deployed around Moscow to intercept enemy missiles targeting the city or its surrounding areas. In development since the 1960s and in operation from 1971 [1] until the 1990s, It featured the nuclear-tipped exoatmospheric interceptor ABM-1 Galosh. The missile was the first Soviet ABM in operation. The A-35 was supported by the Cat House radar, Dog House and Hen House radars as designated by NATO.[1]

The A-35 system was followed by the A-135, currently operational as of February 2007″
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Since radiation from a nuclear attack reaching the suburbs of Moscow would make life unlivable in Moscow, it was considered a tiny victory.
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Less known is that the Soviet Economy had been in continuos recession for twenty year before Gorbachev came into office.
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By that time the Soviet Economy was so bad that if they did attempt to compete with the US, they would have had mass starvation, shortage of heating oil, clothing or other day to day necessities.
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Since the CIA, more or less, dropped the ball on how bad the Soviets were doing economically, we believed that the Soviets were spending money on this, but they were not.
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In reality, the R & D on “Star Wars” was a highly inefficient stimulus package being one of many causes of the huge growth in the national debt during the Reagan years.
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It was, apparently, Reagan’s willingness to sign treaties with the Soviets and placing pressure on them to advance human rights (including freedom of speech – in which was a large force in bringing down the Soviet Union as their economy collapsed) which was his true, best legacy.
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Sadly, “Star Wars” itself was a redistribution of wealth from the poor and middle income to the upper middle income and wealthy.

omgamike,
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You, obviously, have not read what I have written, do not understand or refuse to understand what I wrote.
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First, if our only two options are to borrow or to increase taxes on the very wealthiest.
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Second, taxes do less to slow down an economy than well planned spending does to pick up the Economy.
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If you are 61 (2010 – 61 = 1949) you were born too late to have experienced firsthand what had happened when FDR brought the top tax bracket up to 90% and spent an incredibly large sum of money during WWII, but, should know your history. We went from a state of rapid economic decline to the longest period of regular growth ever seen worldwide (with the past two years being among the relatively rare exception).
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As for recall elections, I am not against the idea, but, I would have wanted them during the Republican congress, Republican Senate and, most of all, when we had both and George W Bush together from 2001 until 2007.

..one more thing regarding Keynes. To my best recollection, fuzzy to be sure, an important part of his argument was who was working. Those hired to dig ditches would otherwise earn little income and have practically no disposable funds to spend. Therefore, most of the newly-earned income, especially at a decent wage, provides those funds and would be spent into the local economy almost immediately. With those Fed-provided jobs, the workers stimulate the economy by becoming customers.
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By comparison, money in a contract for Lockheed Martin to make $billion$ jets is likely to translate less-efficiently into domestic spending as a significant portion of it will go already-active customers with healthy disposable funds. Worse, a portion might not be spent at all, eg. foreign materials and offices, or bonuses and lavish salaries that become trust-funds, off-shore accounts, gambles, European-vacations/houses.. or otherwise not spent in a needy community.

pintortwo,
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That is Keynes.

Patrick and pintortwo
first of all, its not something you can really put a “temporary hold” on, because all the people leave, and hiring them back is very difficult with their high degree of specialization and security clearances.
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also, R&D will include some highly paid specialists but there are also hosts of lower level programmers and other very middle class earners. and new weapons construction? hardly for the wealthy
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as for missile defense, that was some great stuff. I wasn’t really paying attention back when that was a big issue. I just knew we’ve been deploying systems. i just read this frontline report: http://www.pbs.org/wgbh/pages/frontline/shows/missile/etc/postol.html
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in general, R&D and weapons manufacture might not be good targets for added stimulus, but when employment is the critical issue, (Krugman at least thinks it is) it’s not the time to go firing a huge portion of the weapons industry. especially not all people with similar skill-sets making it extra difficult to place them in other work