Obama {deals | caves} on tax cut extensions

[elucidator]

How could we take the chance? We, the left, of all people, how could we risk that by depending on the born-again reasonability of the Republicans? “Well, they would have blinked, they would have caved, because, after all, they are reasonable people…” You kidding me? Since when? Do you mean the sane and reasonable people who stampeded us into a futile and self-destructive war? *Those *sane and reasonable people?

Behold Ms Bachman, of the goo-goo-googly eyes:

Tea Party leader Rep. Michele Bachmann (R-MN) told radio host Sean Hannity yesterday that Republicans may “scuttle” the tax deal if the Bush tax cuts extension is tied to unemployment aid. Calling jobless aid “massive spending,” Bachmann said “tying” the tax cuts “to massive spending is something that would be very difficult for members to swallow.”

from ThinkProgress

Well, she’s just representing here, the Tea Party’s carnivorous loons don’t have that much power, not in comparison to the vast majority of reasonable, rational Republicans…

Are you sure? Are you that sure? Is it safe?

Suppose they didn’t cave. Suppose they bluffed their way into an self-destructive position out of sheer blundertude. Never happened, can’t happen? Read much history?

Last night, if you listened, you heard hundreds of thousands of American families breathing a sigh of relief because this Christmas they won’t be destitute. I don’t mean strapped, I don’t mean cutting down on restaurants and movies, I mean fucking broke! Zero, zip, zilch, nada. If these aren’t our people, who’s people are they? Welcome to Hooverville.

Well, we can blame the Republicans! Huge political victory, propaganda wise, sacrifice some people to advance our cause. That’s Leninism, hooray for oppression that brings the Revolution closer. I despise Leninism, I despise immoral politics. “Sorry your kids go without shoes this Christmas, but we were really, really sure they would cave! Nasty break, sorry about that, vote for us, because we care!”

Said it before, allow me to be repetitious and redundant: sometimes, to do the right thing, you have to be willing to eat some shit. All right, goddamit! Here’s my spoon, here’s my grin…

[Lobohan]

@Sam_Stone

I’ve linked the relevant sites half a dozen times on this board in the past few weeks. Most of the latest research is finding multipliers from fiscal stimulus in the range of 0.2 to 1.2, and multipliers from tax cuts of 1.1 or greater. Of course, there are wide error bars around all of these estimates.

The Romer and Romer paper I’ve linked to multiple times found that exogenous tax increases of 1% of GDP resulted in a reduction of GDP growth of 3%. So these tax increases would have done more harm to the economy than the good that would have been done by a fiscal stimulus costing the same amount of money.

I’ll take that as a no, you don’t have a cite that’s generally accepted as consensus by working economists. One paper does not a consensus make. The CBO actually cited that paper and gave reasonable reasons to not put much weight behind it. PDF cite

That’s the biggest argument for this plan - that tax increase in January, had it been allowed to happen, would have been a significant hit to the economy at a very bad time. Even Democrats agreed with that, and wanted to extend them except for the cuts on the rich. So it appears that the real compromise here was that the Reublicans got their tax cut for the rich, and in exchange Obama got even greater tax cuts for the working class to make the package more progressive.

Put that way, it’s not such a bad deal. Of course, the deficit is the hidden elephant in the room.

It would be 140 billion cheaper if they didn’t extend the Bush tax cuts on the 250k+ earners.

[VinylTurnip]

@John_Mace

The spin on MSNBC is that a lot of Dems are pissed off.

As someone who’s seen firsthand the sort of vacillating, impotent rage the Democrats are capable of if provoked, Obama must really be quaking in his loafers.

[elucidator]

http://thinkprogress.org/2010/12/07/tax-priorities/

This link is not offered in the pristine purity of a “Cite!”, but as the decidedly partisan analysis from ThinkProgress, center-lefty blogsite I have found very reliable in the past.

TL;DR: Analysis: Obama’s Components of the Tax Deal Help 150 Million More People Than GOP Components

[elucidator]

@VinylTurnip

As someone who’s seen firsthand the sort of vacillating, impotent rage the Democrats are capable of if provoked, Obama must really be quaking in his loafers.

Impotent rage, my ass! We don’t bother attacking our enemies, we turn on each other! That’ll teach 'em! Its like the old joke about the ah, Elbonian who catches his wife in bed with another man and points a gun to his head and says “Don’t laugh! You’re next!”

[gonzomax]

@Shodan

I’m curious to find out what you think rich people do with their money - dig a hole and bury it in the back yard?

ETA - Sam Stone’s analysis of the deal is pretty much correct. If this is the sort of compromise we can expect over the next two years, better Obama should dig in his heels and insist on the most radical leftist agenda he can manage - nobody is going to go for that, and at least these kinds of deals which include the worst aspects of everyone’s position will be avoided.

Regards,
Shodan

It is pretty damn obvious they don’t hire people. The tax cuts have been in place for a long time and employment has dropped.
I read about brokers screaming that the rich are sitting on nearly 2 trillion dollars and won’t invest.
The bankers who caused this mess are making it extremely difficult for small business to get capital. The nearly zero rate the banks pay for money gives them secure and easy ways to make money. The American people suffered to save the banks. The banks have no intention of suffering or even taking risk to help the economy.

[Wesley_Clark]

@Sam_Stone

Cite?

Lawmaker claims unemployment benefits boost economic growth

http://leftword.blogdig.net/archives/articles/September2010/29/Fox____Friends_completely_wrong__on_measures_to_stimulate_the_economy.html

According to the CBO UI creates $0.70-$1.90 per $1 spent while income tax cuts create $0.10-$0.40 per $1 spent.

Zandi estimate: “Extending UI benefits” far more beneficial than extending Bush tax cuts. In his July 24, 2008, House testimony, Mark Zandi, Moody’s Economy.com chief economist and a former adviser to John McCain, rated “Fiscal Economic Bank for the Buck,” defined as “One year change in real GDP for a given reduction in federal tax revenue or increase in spending.” “Extending UI Benefits” was estimated to create a $1.64 increase in Gross Domestic Product for a $1 investment. By comparison, “Mak[ing] Bush Income Tax Cuts Permanent” increased the GDP by $0.29 for every $1 invested. The Economic Policy Institute created the following graphic based on Zandi’s figures:

[Fotheringay-Phipps]

Rich people don’t “create jobs” by investing. They create them (to the extent that they do) by buying a lot of expensive things, which create opportunities for middle class people to make money supplying and for working class people to get jobs creating.

I don’t know about how the multiplyers work and all that, but it’s a mistake to focus on investing in this context.

[Whack-a-Mole]

@Sam_Stone

Cite?

Here’s part of it:

Unemployment benefits are one of the most effective tools for boosting economic growth. The President’s Council of Economic Advisers estimates that every dollar spent on unemployment insurance benefits increases gross domestic product (GDP) by $1.60. The nonpartisan Congressional Budget Office ranks extending unemployment benefits as more effective than other policies they analyzed for increasing growth and employment.

SOURCE: http://jec.senate.gov/public/?a=Files.Serve&File_id=75402f9d-0f15-4f89-b4cb-6f39c8f1e4ef (PDF)

[BrainGlutton]

@Fotheringay-Phipps

Rich people don’t “create jobs” by investing. They create them (to the extent that they do) by buying a lot of expensive things, which create opportunities for middle class people to make money supplying and for working class people to get jobs creating.

I don’t know about how the multiplyers work and all that, but it’s a mistake to focus on investing in this context.

Then who does create jobs by investing? Anybody?

[DigitalC]

Unless Obama and the democrats could convince the republicans that they would rather see all tax cuts expire than extending tax cuts for the rich there was no chance at any other outcome. Letting all tax cuts expire would have been an INCREDIBLY unpopular move and probably extremely damaging to the economy, the republicans might be willing to let the country go over a cliff to get their way but they know damn well Obama and the democrats won’t so they have absolutely no incentive to capitulate. Letting all the tax cuts expire would have been the worst outcome for both parties, but a lot more damaging to the democrats, that is not a good bargaining position to be in.

[Fotheringay-Phipps]

@BrainGlutton

Then who does create jobs by investing? Anybody?

Venture capitalists, entrepaneurs etc. Some of these might be rich as well. But some not.

A guy selling high-end furniture has his business uptick and hires another guy, for example.

[flickster]

@Whack-a-Mole

Here’s part of it:

SOURCE: http://jec.senate.gov/public/?a=Files.Serve&File_id=75402f9d-0f15-4f89-b4cb-6f39c8f1e4ef

In this case, would hardly qualify as an objective cite

[Really_Not_All_That_Bright]

The CBO is partisan now?

[flickster]

@Fotheringay-Phipps

Venture capitalists, entrepaneurs etc. Some of these might be rich as well. But some not.

A guy selling high-end furniture has his business uptick and hires another guy, for example.

In using your example: I think the uptick we’re all looking for is the guy who sees an increased demand and establishes a production facility producing the furniture, not just hiring a single salesman.

[flickster]

@Really_Not_All_That_Bright

The CBO is partisan now?

“Senator Charles E. Schumer, Vice Chair”

hmmm, Not sure what would give me that idea…

[Whack-a-Mole]

@flickster

In this case, would hardly qualify as an objective cite

The CBO is partisan? That link cites their work. Here is one that backs it up (http://www.cbo.gov/ftpdocs/108xx/doc10803/01-14-Employment.pdf (PDF)).

From that link:

“CBO estimates that the policies would raise output cumulatively between 2010 and 2015 by $0.70 to $1.90 per dollar of total budgetary cost.”

If we just take the middle of that spread (rather than the higher $1.60 which was supported elsewhere) we are at $1.30 per $1 spent.

[Whack-a-Mole]

@flickster

“Senator Charles E. Schumer, Vice Chair”

hmmm, Not sure what would give me that idea…

Or rather than an ad hominem attack you could point to specific errors. As I just noted that paper is supported with citations for their numbers.

You are attacking it for who is saying it. How about you try what is being said?

[flickster]

@Whack-a-Mole

Or rather than an ad hominem attack you could point to specific errors. As I just noted that paper is supported with citations for their numbers.

You are attacking it for who is saying it. How about you try what is being said?

Glad you have undying faith in our political class. Myself, I have a hard time trusting the snake oil salesman when he is telling you how good his snake oil is. For that matter, no different in GW telling us how good the TARP plan was…

[Whack-a-Mole]

@flickster

Glad you have undying faith in our political class. Myself, I have a hard time trusting the snake oil salesman when he is telling you how good his snake oil is. For that matter, no different in GW telling us how good the TARP plan was…

Indeed…so look at the evidence they provide. Which they did in this case.