Taughannock Falls

Taughannock Falls
from: althouse.blogspot.com

Tuesday, December 7, 2010

Making a good deal, or getting the shaft?

Here's an observation from Paul Krugman:

A further thought on the tax deal: didn’t the administration repeat exactly the same mistake it made on the original stimulus? The stimulus was too small; but it also too short-lived, with the maximum impact on growth coming in the winter of 2009-2010, then turning negative just in time for the midterm election.

Now we have unemployment insurance and payroll tax cuts for 2011, going away in 2012 — just in time to put the administration in big trouble as the election looms.

This only makes sense if you believe we’ll be in a self-sustaining, strong recovery by late 2011. Stranger things have happened, but …

And remember, mistaken forecasts of self-sustaining recovery taking hold were a big part of the original stimulus mistake

The stimulative aspects of this deal only partially compensate for the reckless, massive giveaway to the wealthy, one that several millionaires and billionaires took pains to say they didn't want. And, as Paul Krugman notes, these positive benefits are only short term. It seems as if this lame-duck deal is little better than what we could have done after the Republicans take over the House in January. After all, the top 2% tax-cuts are not going to become more popular, no amount of GOP doublespeak would be able to change the perception, shared even by a majority of Republican voters, that these cuts do no one but the rich any good. The evidence is mounting that President Obama is listening to advice from D.C. operatives, who are clueless as to what ordinary folks outside of the Beltway are thinking.

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