Tuesday, December 14, 2010
Christopher Hayes at The Nation on the Obama Deal:
In an essay, Tax Cuts Forever?
, he concludes with this: (emp add)
My sense is that the White House economic and political team is starting to panic as they recognize the stubborn persistence of unemployment. They know the economy needs more stimulus, and that Republicans are loath to allow them to deliver it. Through this deal they were able to secure some stimulative tax cuts, like the payroll tax reduction. Briefing liberal writers, the White House sold the plan as stimulus 2.0. And even if tax cuts for the rich aren't stimulative, it's money into the economy. At this point, the White House will take what it can get.
That's the only way I can see why the 2% cut in Social Security taxes was part of the mix.
"it's money into the economy. At this point, the White House will take what it can get." As if any money going in is inherently a good thing. What if some of it goes to commodities speculation or other predatory ventures? This is not about money, it's about the allocation of natural resources; this is the post-peak oil world where the policy question is, "How to redistribute a shrinking economic pie?" And few understand that center, left and right are outdated guides to facing the limits to growth.
Anonymous speaks wisdom above.
Market economies have 3 components
The smart money is always looking for door #3.
The tax cuts just give the high rollers more chips to play casino capitalism.
this is the post-peak oil world where the policy question is, "How to redistribute a shrinking economic pie?"
The more you redistribute, the more the pie will shrink. Who wants to put time, energy and capital into baking pies when they know they will be "redistributed" to other people?
When the government once again assumes the proper role of protecting people's pies from those who would redistribute them to those who do not bake pies or pay for them, people will be inclined to bake more pies. Then the economic pie will grow again.
You do not understand the physical limits to economic growth. But you will...