Baker: Is This Stimulus Big Enough?
January 06, 2009
Another expert I consulted yesterday was Dean Baker, of the Center for Economic Progress. Here's what he wrote me: The business tax cuts are presumably mostly political. The EITC -type cuts are progressive and will be spent, so they are not bad. As you get higher up the income ladder with the $500 tax cut for workers, the percentage spent is likely to drop. The track record on accelerated depreciation tax cuts and tax cuts for adding employees are not great. I will say that of all the business tax breaks, accelerated depreciation probably gives the best payback.
Aaron: Worry About The Public Works, Not The Tax Cuts
January 06, 2009
Barack Obama's decision to devote around 40 percent of his stimulus package to tax cuts has caused some consternation among those of us who think, dollar for dollar, infrastructure investments would do more to help the economy. But not everybody sees it that way. While I was canvassing the opinion of some experts yesterday, I got in touch with Henry Aaron, the economist from Brookings. He always has provocative things to say and yesterday was no exception. Here's what he wrote me: We should all be worrying less about tax cuts, and more about the content of the direct spending.
Obama Adviser: The Tax Cuts Make Sense
January 05, 2009
If the government wants to stimulate the economy, it's generally better off spending that money directly--on infrastructure projects, unrestricted aid to the states, or direct assistance to the financially needy--than it would be cutting taxes. That's led writers like me to question Obama's decision to include as much as $300 billion in tax cuts as part of a stimulus package that will ultimately be worth $675 to $775* total. But those doubts are misplaced, according to a senior economic adviser who just spoke with me.
My, My, Those Tax Cuts Look Big
January 05, 2009
President-Elect Obama is now willing to include as much as $300 billion in tax cuts as part of his proposed economic stimulus. While the final numbers aren't set yet, those tax cuts would apparently account for roughly 40 percent of the total package, which is expected to come in at arond $600 to $700 billion total. Some of the cuts would benefit individuals; others would go straight to businesses, as incentives to create new jobs.
December 31, 2008
It's been more than a month since the auto industry came to Washington, begging for a rescue. And, since that time, it's become clear just how dry Detroit's reservoir of goodwill has run. For conservative opponents of bailout legislation, like Alabama Senator Richard Shelby, the U.S. auto industry is an object of scorn—"dinosaurs," he has called them. For the liberals who support a rescue, like Connecticut Senator Christopher Dodd, Detroit remains an embarrassment.
Yes, Even Toyota Is Losing Money
December 22, 2008
Toyota Motor today reported that it will lose $1.7 billion for this fiscal year. It's not only the biggest loss since the company's founding in 1938. It's the only one. Analysts said Toyota’s downward revision, its second in two months, showed that the worst financial crisis since the Depression is threatening not just the Big Three but even relatively healthy automakers in Japan, South Korea and Europe.
Bush To Detroit: Don't Drop Dead
December 19, 2008
As you've probably heard by now, President Bush announced this morning that he wasn't going to let the domestic auto industry collapse. At least not on his watch. And while it'll probably take a day or two to sort out the details, and what they mean, here's the gist of it: Bush is authorizing the Treasury Department to loan Chrysler and General Motors $17.4 billion. (Ford has said it doesn't need money right now.) The money will come from the Wall Street rescue fund, or what's left of it, and it comes with a number of strings attached.
Why Bush Has To Save Detroit (for Now)
December 12, 2008
As of Friday night, it still appeared the Bush Administration was prepared to do what Senate Republicans wouldn't: Rescue the auto industry.
Obama On Health Care: "this Year ... This Administration"
December 11, 2008
At the Chicago press conference, Obama just gave the clearest signal yet that he intends to make health care reform a top priority. After running through the litany of familiar problems--rising costs, faltering coverage, poor quality--he vowed to tackle the problem "this year and in this administration." Afterwards, he confronted head-on the argument that the rough economy makes this a poor time to try health care reform. He noted that economic insecurity and our health care crisis our inextricably linked.
Obama Pushes Harder On Auto Bailout
December 11, 2008
Barack Obama just began his press conference by noting the new unemployment figures and pushing Congress to pass a rescue for Detroit. (Much as Michelle predicted.) "I understand people's anger and frustration" at the auto industry, noting that he had pushed Detroit to build more fuel efficient cars early in his campaign. But, Obama continued, "at this moment of great challenge, we cannot simply stand by and watch this industry collapse. ... doing so would lead to a devastating ripple effect through the economy." He reiterated his pledge for "short-term assistance ...