Due to my busy finals schedule, I have decided to forgo posting next week. Unless something urgent comes up that needs my analysis, I will probably not be on my blog. I will not be on the radio next week either. I will be back posting the week after my finals are over.
Daily Archives: December 10, 2010
Jesse Jackson, Jr. has a very interesting op-ed for CNN regarding President Obama’s plan to extend the Bush tax cuts looks eerily similar to what Ronald Reagan did before he instituted his Reagomics plan. The mentality is “starve the beast.” The logic goes, if taxes are lowered for the wealthiest Americans that will mean less revenue for the federal government to spend. As a result, congress will be forced to cut spending on social safety net programs. This sounds nice if it actually worked. Jackson writes:
This raises the question: Will Obamanomics end up looking like Reaganomics?
Clearly, Obama comes from the exact opposite philosophical starting point from Reagan and his supporters. If the decision were his alone to make, the president would adopt a tax cut for 98% of Americans and let the upper-income tax cuts from the Bush era expire.
However, if he refuses to fight against extending the high-income tax cuts, then the effect will be the same: leaving our senior citizens, our young people, our disabled, our uninsured and our veterans out in the cold when we cut the programs they need.
What’s the alternative? First, we should enact a middle- and low-income tax cut. Those Americans are more likely to spend the extra money they will have in their pockets, making the economic impact of that targeted tax cut stimulative. The House has passed such a bill. The Senate should follow suit.
Next, we should take the amount that would have been spent on the high-income tax cut — nearly $800 billion — and invest that in a Works Progress Administration-like jobs program that would put Americans back to work.
What’s more likely to boost the economy — a $75,000 tax break to somebody who makes $1 million, or a $75,000-a-year job for an unemployed American worker who has a family to feed?
This plan is interesting. The problems is perspective. Republicans support supply side economic theories for the economy to recover while Democrats see investment and Keynesian economics as the way forward. Neither solve the problem completely, but in certain situations have a stimulus like this at least will reduce unemployment a lot faster because people do not have to wait on a small business to decide to start hiring. Sadly, a WPA will probably not be created, but it does show other alternatives you can do instead of tax cuts.
Top Global Issues:
Obama’s Next Agenda Item: Tax Policy
Repeal of “Don’t Ask, Don’t Tell” Falls Short In Senate
U.S. Calls On China To Restrain North Korea
New Deal At Cancun Climate Conference
AU Suspends Ivory Coast
U.S. Planning Possible Sanctions Against Ivory Coast
Figures of Note:
Opinions of Note:
Gema Martin-Munoz on Arab Feminism
Jacob Weisberg on How Obama Lost The Tax Cut Debate
My First Thought: The Front Burner
Debating what topic President Obama should tackle is a bit of doosie. Everyone has an opinion. Should it be alternative energy? Repealing DADT? (which I advocate for in my column later today) Ratifying the START Treaty? Does it really matter? The true answer is it doesn’t. Ever since this president came into the White House he has let congress defined his agenda. As a result, it has been slow and exhausting. He has not taken the initiative to fight for what he wants. He has ideas yes, but he can’t communicate them to the American people. My problem is not what he puts on the front burner, but how he talks about it. After the lameduck session, President Obama now wants to take on tax reform. Bad move. It is does need reform, don’t get me wrong, but this is a topic that very few people really understand. Selling macroeconomic policies to the American people is not the easiest thing in the world. He needs an easy black and white topic. Something with a clear right and wrong to score a political victory for himself. With DADT at 67% support for repeal by the American public, I think it needs more time. Yes, it failed in the senate, but it mainly procedural and not an actual vote on the merits of the law itself. This topic should go the top of the docket.
Photo Credit: Newsweek