It's The Tax Policy, Stupid
In a column arguing for short term stimulus, Peter Orzag writes:
When policy makers put in place measures carefully designed to reduce the federal deficit in the future, most of them happen. This is a good thing, since enacting more stimulus today and more deficit reduction to take effect later is exactly what the U.S. needs. It’s also what makes the ongoing jobs-versus-austerity debate so frustrating. What we really need is to be bolder on both jobs and austerity, by pursuing a combination policy.
Those who are most concerned about the weak labor market should be most willing to do whatever it takes -- including combining delayed budget cuts with stimulus -- to get the most stimulus passed. And those who favor a combined approach shouldn’t be characterized (as I have been) as pro-austerity and anti-stimulus.[...] [Emphasis supplied.]
Someone hurt Peter Orzag's fee fees. A couple of points: Orzag is arguing for "maximum stimulus now." Where was he in January 2009? Second, his statement about spending cuts in the social safety net is true. But tax increases for deficit reduction NEVER survive. It's funny how to Orzag, the Clinton tax increase of 1993, the most important deficit reduction measure of the last 25 years, is not even worth a mention. Of course we know why, it undermines his argument. THAT deficit reduction measure did not hold. Taxes were cut twice during the Bush Administration. So Orzag says we should agree with him to cut spending in the future for more spending now. But what about the Bush tax cuts?
Sorry Mt. Orzag, you are pro-austerity and pro cutting the social safety net. It's what you don't write about that proves it to me - tax policy.
Speaking for me only
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