I can’t help putting up a diary about this. It’s too much. I have to have the cathartic relief of publicly expressing my horror in a diary.
Obama says country ‘cannot afford inaction’ on economy
Several congressional Republicans, however, expressed concern about the large amount of spending in the bill and criticized the tax cut provisions for not going far enough.
Obama makes a public appeal for his stimulus package
House Minority Leader John Boehner (R- Ohio), appearing on ABC News’ “Good Morning America” this morning, complained that the stimulus plan is laden with new government spending — and borrowing to support it — spending that “has nothing to do with creating jobs or preserving jobs.”
The problem is (a) everybody is in debt and (b) people need jobs.
Far from rolling over, House Republican leaders are trying to win concessions from President Obama over the massive economic stimulus package and have proffered a bill of their own to put on the negotiating table. …
Their bill, called the Economic Recovery and Middle-Class Tax Relief Act of 2009, promises a host of tax-cutting measures. It includes a 5 percent “across the board” income tax cut; an increase in the child tax credit from $1,000 to $5,000; a freeze on capital gains and dividends tax rates at 15 percent; and a number of other measures targeted toward businesses.
This in spite of
when it comes to economic stimulus, public spending provides much more bang for the buck than tax cuts. …
tax cuts could be spent or saved, and saving is considered bad right now. But is saving such a terrible thing? Doesn’t savings go into banks, which gives banks collateral to make loans? At least that’s what we thought before the bank bailout package failed stimulate bank loans.
Krugman’s QED: “Public spending rather than tax cuts should be the core of any stimulus plan.
Chairman Greenspan’s main arguments for tax cuts over spending increases are not based as much on economics as on politics. Greenspan put forward two propositions in his testimony:
Spending tends to grow while tax cuts are limited: “history illustrates the difficulty of keeping spending in check.. .In contrast to most spending programs, tax reductions have downside limits.”(14)
Should the current surplus projections prove too rosy, it is easier to reverse a tax cut than a spending increase.
Neither of these propositions is supported by the empirical evidence.
evidence suggests spending – not tax cuts – is clearly “what will have the biggest and most immediate impact” in fixing the economy …
Most of the money from the recent tax rebate was saved rather than spent, thus blunting its stimulative benefit. By comparison, other options–such as infrastructure spending, aid to states, food stamps, and unemployment insurance (UI) benefits–are much more cost-effective because they target the needs most likely to channel money back into the economy.”
Likewise, Economy.com’s Mark Zandi (himself a Republican) recently estimated that each dollar dollar of refundable tax rebates only boosts GDP by about $1.26, while each dollar of infrastructure spending could provide a $1.59 boost.
People use tax cuts to pay down debt, so do businesses. That money winds up in the hands of the banks, who, as we’ve seen, sit on it to restore value to their balance sheets.
Besides, I’d love to see somebody run the numbers on the “across the board 5% tax cuts” Boehner is proposing, and see who is going to get most of the money! (Hint: It’s not the bottom 80%]
