Sunday, December 2, 2012

Fiscal Policy Bait and Switches

Sahil Kapur catches the Republican Senator from Utah living up to his reputation of being Whorin’ Hatch:
But what he proposed this week was a classic bait and switch on the American people—a tax increase double the size of what he campaigned on, billions of dollars in new stimulus spending and an unlimited, unchecked authority to borrow from the Chinese. Maybe I missed it but I don’t recall him asking for any of that during the presidential campaign. These ideas are so radical that they have already been rejected on a bipartisan basis by Congress.
Where to start with this nonsense? First of all, the Federal budget deficit is not the same thing as our bilateral trade deficit with the Chinese, but if Senator Hatch is so worried about government deficits – he should be supporting more tax revenues. Secondly with the economy still below full employment, short-term stimulus paid for by long-term tax increases on the well to do is precisely the type of policies a lot of economists advocate. Finally, you did miss it Senator – the President did campaign on these proposals. If Senator Hatch is so exercised over bait and switches, then he needs to explain his 2005 support for this:
Ryan’s fight against Social Security has been ongoing since he pushed President George W. Bush to privatize the program in 2005
And no – George W. Bush did not campaign on this proposal during the 2004. Mercifully, it failed back then but it does seem that the Republicans would rather sacrifice Social Security benefits than impose another penny of taxes on the very well to do. Update: Tax Policy Center notes that the President has put forth both a $1 trillion proposal as well as a $1.6 billion proposal so maybe this is where Hatch gets his “double the size” claim. Note two things. First – the latter was proposed by the President back and February. Secondly:
That figure includes the $968 billion noted above plus another $593 billion in tax increases. The largest of those, by far, is the president’s proposal to limit the value of itemized deductions and certain exclusions for upper-income taxpayers.
Wasn’t limiting deductions the Republican idea for revenue enhancement?

1 comment:

coberly said...


i am no economist, and don't pretend to know what i am talking about (except about SS).

but i thought i was the only one saying that taxing the rich during THIS recession was exactly the right thing to do.

your formulation is better than mine, but it's great to hear that real economists agree with me. can you name names?

btw the "please prove you are not a robot" feature is more than my old eyes and brain can cope with.