Yesterday we posted that the looming decision on the Bush tax cuts put the Dems in a political pickle: let some or all or them expire and jeopardize the prospects of an economic recovery … extend them and implicitly concede that Bush’s tax plan was right. Oh, what a dilemma.
Peter Orzag – Obama’s budget director who jumped ship last month – fueled the debate with an op-ed in the NY Times (link below).
Orzag opined:
What to do about the Bush-era tax cuts scheduled to expire at the end of the year?
,,, the best approach is a compromise: extend the (Bush) tax cuts for two years and then end them altogether.
Ideally only the middle-class tax cuts would be continued for now. Getting a deal in Congress, though, may require keeping the high-income tax cuts, too. And that would still be worth it.
Higher taxes now would crimp consumer spending, further depressing the already inadequate demand for what firms are capable of producing at full tilt.
And since financial markets don’t seem at the moment to view the budget deficit as a problem — take a look at the remarkably low 10-year Treasury bond yield — there is little reason not to extend the tax cuts temporarily.
Hmmmm …. wonder why the guy decided to leave the Obama economic team ?
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The op-ed made me smile until Orzag pushed one of my hot-buttons:
Many conservatives (would) make the tax cuts permanent for the likes of Warren Buffett, even though he’d prefer they didn’t.
First, Billionaire Buffet doesn’t speak for everybody making more than $200,000.
Second, if Warren wants to pay more taxes, then why doesn’t he just write a fat check to the Feds and shut the (expletive deleted) up already ?
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Full Op-ed: New York Times, One Nation, Two Deficits, PETER ORSZAG, September 6, 2010
http://www.nytimes.com/2010/09/07/opinion/07orszag.html?_r=1&ref=opinion
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