Wednesday, September 22, 2010

That Blue Dog Won't Hunt

It is amazing how uh intellectually flexible supporters of extending tax cuts on income over $250,000 can be. They were the deficit hawks as recently as the last vote on spending.

Also the argument for cutting taxes was to encourage saving (total utter nonsense) and the argument for extending the cuts is to encourage consumption (80% nonsense). Uh what do you want rich people to do with their money ?

I have a long quote from the Huffington Post where Arthur Delaney listens to them so you don't have to.

Many of the House Democrats who support extending the tax cuts, all of which will expire after December if Congress does nothing, opposed reauthorizing extended unemployment benefits back in May, when they said the economy was too strong to justify adding to the deficit. HuffPost asked one such Tax Cut Democrat about the apparent contradiction over deficit spending, since the cuts would add billions to the deficit.

"The economy was growing at the end of December 5.6 percent. It's now growing at 1.6 percent," said Rep. Gerry Connolly of Virginia (who supports the cuts but has not signed the letter). "Many economists say that if you raise taxes on the upper-income brackets, it will shave half a point off of GDP."

OK so Connolly points to the inventory bounce in December to explain his depraved vote in May. Uh Congressman, do you think your constituents don't know the difference between December and May ? Flash first quarter growth estimates were available in May.

Also I note that the congressman is quoting un-named economists who seem to claim a multiplier of about 1.75 for tax cuts to the rich. I don't believe there is any real live economist who has ever claimed that.

Finally, the argument is now that we need more stimulus hence temporary tax cuts for the rich. This argument just can't be made with a straight face, since we know of much more effective stimuli than temporary tax cuts for the rich (in a pinch I could probably think of a less effective stimulus but it would be a challenge).

I want to ask Connolly why he doesn't support permanent extension of Bush cuts on income under $250,000 (meaning over $6,000 next year for rich families) and a temporary rebate of an equal amount to each family. Best if he gets to explain his reasoning to each of the families in his district who would get less under his plan.

I think the only plausible explanation is due to Atrios. Some blue dogs know they won't be re-elected and they are trying to please the rich so the rich will hire them after they are kicked out of the House.

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