Friday, March 9, 2012

On letting the Bush tax cuts die a natural death

The current Democratic mantra regarding the Bush Tax Cuts is to raise them on the top incomes but leave the cuts in place for families making $250,000 or less.  Given political gridlock that makes any short-term alternatives linked to economic recovery unlikely, Felix Salmon, at Baseline Scenario, argues for letting the whole package of Bush Tax Cuts die when they are due to expire at year's end:
We are dealing with a Republican Party that will block any package that raises taxes on anybody. They will block any tax increase, even if it hurts them in the general elections, because they are completely locked in by the Grover pledge and the Koch brothers. The only choice we have is between extending all of the tax cuts and complete gridlock, which means that they all expire. And if we extend the Bush tax cuts, we are just four Senate seats away from making them all permanent.

Can't get enough of this graph.
Given that choice, I vote for gridlock. I understand the counterargument: tax increases would weaken the recovery and increase unemployment in the short term. But those tax revenues are crucial to the long-term health of the middle class. Ending the Bush tax cuts will slash projected deficits and push right-wing claims about the bankruptcy of Social Security and Medicare decades into the future. Yes, conservatives will always want to privatize Social Security and dismantle Medicare, but they only have a chance of actually succeeding when government deficits make those programs seem unsustainable, bringing so-called centrists over to their side.

So, for me, letting all the tax cuts expire on December 31 is better than making them permanent. Letting them all expire is also better than making just the “middle-class” tax cuts permanent. (Another note to Democrats: since when do we push for tax cuts for families making $200,000 a year?)  ...
In the end, I think the Bush tax cuts were one of the two most catastrophic policy decisions of this century (the other was the Iraq War). They were a terrible idea then and they are a terrible idea now. I think letting them all expire would be good for the world and for the middle class. And whether or not that makes me a “fiscal conservative,” I think it makes me a Democrat.

"Jobs Day By the Numbers"

From Think Progress:  "Jobs, Jobs, Jobs"
Today is Jobs Friday.
Here’s the rundown on the monthly employment report from the Department of Labor.
-647,000…the number of jobs
lost in state and local governments since August 2008.
-22,000…the average number of public sector jobs
lost each month in 2011, thanks to ongoing spending cuts at all levels of government which in turn continue to drive layoffs at the state and local level.
-14,000…the number of construction industry jobs
lost last month, something which could have been avoided and turned into a net positive for the economy if Republicans had not blocked the infrastructure investments in the American Jobs Act.
-6,000…the number of public sector jobs
lost last month, thanks to ongoing spending cuts at all levels of government which in turn continue to drive layoffs at the state and local level.
3…the number of consecutive months with more than 200,000 jobs gained.
24…the number of consecutive months of private sector job growth.
31,000…the number of manufacturing jobs created last month.
61,000…the additional jobs created during the months of December and January, according to revised figures released today.
61,000…the number of new health care jobs created last month.
227,000…the number of net new jobs created in February.
233,000…the number of private sector jobs created in February.
245,000…the average number of new jobs created over the past three months.
444,000…the number of jobs in durable goods manufacturing added since January 2010.
GOP Austerity in Action: Public Sector Job Losses Drag Down the Recovery
While Republicans are calling for tens or even hundreds of thousands more public sector workers to be axed, it’s clear that the public sector has already severely contracted even as the private sector recovers. Check out this chart (red is public sector employment, blue is private sector employment):