P.L.A. – A Journal of Politics, Law and Autism has a nice look at the economy and Bush
Economists have suggested that the amount of needed stimulus is $100 billion this year. Mr. Bush cannot find $100 billion to stimulate the economy without either rolling back his tax cut or increasing the deficit. Either option causes Mr. Bush to break a major campaign promise.
All courses open to Mr. Bush are fraught with political peril. First, he can do nothing. If Mr. Bush does nothing and the economy goes into a double dip recession or a deflationary cycle he will be blamed for taking no action and being indifferent to the economic suffering of Americans.
If the Democrats have both a spine and a brain, they will feed that perception by proposing a stimulus package that includes items such as 1) extending unemployment benefits; 2) cutting payroll taxes for working Americans; and 3) increasing government spending for such projects as school building repair, infrastructure improvements and funding a prescription drug benefit for seniors. Democrats should propose paying for those projects by rolling back portions of the 2001 tax cut that are not yet in effect and which benefit the wealthiest Americans.
Go read the whole thing.
leanleft
Kevin
tgirsch
Kevin T. Keith
Judd
Actually, IIRC, that amount was to avoid a “Liquidity Trap”, a situation where the economy is so depressed and interest rates are so low that nobody is willing to invest. Lowering interest rates further will not stimulate the economy. The only solution is pumping money into the economy.
Of course, there are two ways of doing this, one is via government spending or through tax cuts. Fruther, the government could engage in deficit spending.
In fact, deficit spending during recessions is one of the tenets of Keynesianism as I note here. Of course this is not without its problems.
…2) cutting payroll taxes for working Americans; and 3) increasing government spending for such projects as school building repair, infrastructure improvements and funding a prescription drug benefit for seniors.
Considering the horrid prospects for Social Security and Medicare already, this probably is not a wise idea.
Not so fast. Payroll taxes could be easily reduced by taking the entire SS off budget and placed into the much laughed about ‘lock box’.
Sadly, the dems are afraid to do that because it would look like they were cutting ss by lowering future revenues, and the goopers are loath to cut our most regressive tax.
Not so fast. Payroll taxes could be easily reduced by taking the entire SS off budget and placed into the much laughed about ‘lock box’.
What? I fail to see how that would reduce the payroll taxes. All that is doing is taking the “the money out of the bank and putting it in a lock box.”
At the current tax rates, the Social Security Fund will run into massive problems in about 25 to 30 years. Seems quite aways off, but the longer one waits to address the problem the uglier the fix gets.
For example to fix it right now, you’d have to raise payroll taxes 63%, that is increase the tax rate from about 15% to 25%! Right now, immediately.
The Democrats would much rather demagogue on the issue than address. Talking about medicare paying for drugs is just fiscal insanity.
Balony. SS currently runs in surplusses far surpassing current SS expendatures. This is the only reason why our deficts appear so small…because excess ss income is booked as part of total income.
Even sluggo was smart enough to raise payroll taxes after cutting income taxes…he knew who was paying the lion’s share of the bills.