The New Republic

Awful idea actually. There was a political idea that Obama could have used against the GOP. Try to extend whatever benefits there are to working class people and dare the GOP to not do it becasue it doesn't favor the rich...

- MikeB.

July 22, 2010 at 9:29am

I cannot believe Democrats would consider this; it would reinforce the criticism that the GOP and Democrats are the same thing. Plus it would make Democrats look like complete hypocrites after the (much deserved) scorn they heaped on the GOP.

- tnmats

July 22, 2010 at 9:38am

it's an incredibly stupid idea. it will make it impossible to actually sunset them later, because it will completely support the claim that such cuts are actually stimulative, meaning, we can never afford to end them.

- miceelf

July 22, 2010 at 9:45am

Chait -- take an econ course. Gov spending is a component of GDP so of course increasing G will increase GDP. Doesn't improve the economy as increasing G doesn't create any economic value. A monkey could increase GDP and reduce unemployment -- Have Gov hire all unemployed to dig holes and fill them in. Unemployment rate goes to 2-4% and GDP increases. Of course a version of this passes for liberal economic policy. And the issue with the tax custs is that a lot of small business owners -- you know the folks who actually create sustainable private sector jobs --- would be adversely affected as would private sector job creation. And even the economic Obamanation knows this.

- mr_rationale

July 22, 2010 at 9:52am

Well, no, Jonathan, they won't. Before the deficit "hawks" get worked up about red ink, they direct their greatest attention at enacting and preserving tax cuts for the rich. In Grand New Party, Ross Douthat and Reihan Salam argue for a Republican Party that puts more emphasis on what they call the Sam's Club voter. Good luck with that, guys. The center of gravity in the GOP is defined by the call for tax cuts today, tomorrow, and forever. Call it the Norquist principle, after Grover Norquist.

- liberal reformer

July 22, 2010 at 9:55am

Yes, Lib Reformer. Do to targeting of any questioning of that orthodoxy by groups like the Club for Growth and Norquist, any GOP member that would question this rather dumb idea is now a target.

- MikeB.

July 22, 2010 at 9:58am

There is a public intellectual by the name of Richard Posner, rationale, and he is just a little bit smarter than you are. Like say from here to Alpha Centauri (the nearest star to our solar system at 4.1 light-years distant) smarter. He is a conservative, but after the financial crisis, he discovered the virtues of John Maynard Keynes, and wrote about them in his article, How I Became A Keynesian, for this very publication. Posner has been critical of the markets-are-perfect types, like Eugene Fama. Fama believes that markets are always self-correcting, but as Posner says, that is not convincing. Sometimes huge demand shortfalls occur, which is what we confronted a couple of years back. Jonathan Chait surely has taken economics, but there is no evidence that you have.

- liberal reformer

July 22, 2010 at 10:04am

Since the Bush tax cuts are the first cause of the current structural deficit, there's a simple test as to whether any given person is serious about reducing the deficit and returning to fiscal responsibility: Do you want to extend the Bush tax cuts? If so, then you are not serious about the deficit or fiscal responsibility. Simple as that. And since fiscally irresponsible, deficit-loving Republicans are likely to control at least one house of Congress in 2011, the only way to be sure that the Bush tax cuts ever expire is to allow them to expire now. Wait a year, and they become permanent, and the United States guarantees a Greece-like hard landing in the mid to late 2010s. The coincidence of the tax cuts' sunset provision and temporary Democratic control of the budget is like a gift from God. If Democrats don't seize the opportunity to let the tax cuts expire, then we all deserve the national bankruptcy that conservative budget policy will inevitably produce. But the worst thing is that the Democrats who propose extending the tax cuts are the same ones who, like Republicans, perpetrate the lie that they are "fiscal conservatives." If you want to reduce the government's income without reducing its spending by an equal or greater margin, you are by definition not fiscally conservative. That is the opposite of fiscal conservatism. I know the newsmedia doesn't like to be bothered by inconveniences like facts or policies, but that only raises the need for publications like TNR to speak straightforwardly. When someone promotes un-paid-for tax cuts but calls himself a fiscal conservative, TNR needs to get into the habit of calling that claim a lie - and the one who makes it, a liar. And while it's at it, perhaps TNR could also do truth a favor by refusing to call un-paid-for tax cuts "tax cuts," since they're not. They're tax shifts, and barring a currency devaluation, they result in higher taxes and lower economic growth over the life of the debt than would have resulted from simply raising the same amount of revenue through taxation rather than borrowing. So when you tote up the numbers when the debt is repaid, un-paid-for "tax cuts" are in fact tax increases. Job-killing, growth-stunting tax increases.

- rhubarbs

July 22, 2010 at 10:07am

Tax rates are low. We do not have a shortage in liquidity for the wealthy to invest. We have a shortage in consumption and investment. If Obama were pushing a stimulus -- fighting the good fight -- it would make it harder for people to fill the vacuum with this gibberish.

- keepin_on

July 22, 2010 at 10:18am

Keepin_on says it. This IS the worst idea in the world, both economically and politically. To contain the deficit AND produce stimulus, we should be raising taxes on the wealthy, who have the dough and aren't spending it. Then we either spend it for them on infrastructure or give it to people who will spend all of it on consumption. The idea is absurd.

- roidubouloi

July 22, 2010 at 10:22am

Given that the GDP explicitly measures total economic value, it's puzzling that Rat wants to define segments of the GDP as economically valueless. But it is true that simply increasing the GDP is not necessarily a sign that all is well, and that's as true of private industry's output: for example, if private companies had to deliver all goods to individual consumers by helicopter, that would increase the market cost -- the economic value -- of individual commodities, and create all sorts of jobs, but it would not be an improvement over the current system relying on cheaply provided public infrastructure. Conversely, if we all produced our own goods and did not need to trade for them, there wouldn't even be a GDP as we understand it, but people wouldn't feel as though they were living through an economic crisis. Is "economic value" only that which allows some private individuals to become rich? If I create a private company that employs people to dig holes and fill them in, and then somehow manage to advertise my way into creating a market demand for freshly filled-in holes, is that economic value? If I manufacture collectible Adam Smith bobble-heads and then make them de rigeur on the elementary-school playgrounds of America, am I creating economic value?

- frippo

July 22, 2010 at 2:47pm

Agreed with Keepin and roi. But 'barbs makes the same point I thought when I first read the post. Are you (the Republicans) serious about debt reduction? As many of you saw, Stephen Moore (shots aside) did answer that question on the CNBC clip Jon posted a little while back. If you remember, Moore suggested the responsibility for debt reduction should be carried on the backs of the poor and middle class by increasing taxes on them. In that sense then, Moore is one conservative serious about reducing the debt, and has proposed a solution.

- jet

July 22, 2010 at 4:55pm