Bruce Bartlett reminds us of the George W. Bush: Screwup-in-Chief, 2001-2008. Short version: Iraq, WMD, unfunded Medicare Part D, Sarbanes-Oxley, Katrina, Harriet Miers, no vetos until second term, tax rebates+credits and nonpermanent tax cuts, steel tariffs, ag subsidies, keeping Cheney, compassionate conservativism, signing McCain-Feingold after threatening to veto, neutering SecTreas, and GSEs.
I don’t think all of these are such disasters, but the list does bring back memories. Here’s the list as Mr. Bartlett recounts it:
Over the weekend Republicans unveiled their brilliant new political strategy strategy: the George W. Bush years were the good old days and we should go back to them. A stupider strategy is hard to imagine. The Bush years were an unmitigated disaster. Here is a quick list of his screw-ups off the top of my head in no particular order. Readers are encouraged to add others in the comments.
Thinking that Iraqis would welcome liberation and immediately embrace Western-style democracy, and failing to manage the occupation of Iraq properly. (How can people defend Bush on the basis that he kept us safe after 9/11 without also blaming him for 9/11? If he had the power to keep us safe after 9/11 then why didn’t he keep us safe on 9/11?)
Bullying the intelligence community into giving him the justification to start a war in Iraq over non-existent WMDs.
Ramming through a massive new, unfunded Medicare drug benefit when the system was already broke.
Rushing to enact the hugely expensive Sarbanes-Oxley Act in reaction to the Enron scandal even though there was no evidence that it would have prevented it from happening.
The total failure to deal with Katrina.
Nominating the totally unqualified Harriet Miers to the Supreme Court and appointing other nincompoops to high level positions solely on the basis of slavish loyalty.
Not vetoing anything until two years into his second term.
Thinking that tax rebates and tax credits stimulate growth and failing to make any of his tax cuts permanent.
Destroying the Doha round of trade negotiations by imposing steel tariffs and enacting a massive new agricultural subsidy program at its outset. (The whole point of Doha was to reduce agricultural subsidies.)
Failing to name a new vice president in 2004 who would have been a viable Republican candidate for president in 2008.
Thinking that cooperating with Ted Kennedy on the No Child Left Behind Act was a good idea and believing in “compassionate conservatism.” (Made ordinary conservatism look uncompassionate.)
Signing McCain-Feingold after promising to veto it during the 2000 election.
Neutering the Treasury secretary and failing to push for tougher oversight of Fannie Mae and Freddie Mac, thus contributing to the housing crash and economic crisis we have experienced for going on two years with no end in sight.
Just to remember the fiscal disaster, here is the Federal budget balance, and cyclically adjusted budget balance:
Figure 1: Federal budget balance with (blue) and without automatic stabilizers (red bold). NBER defined recession dates shaded gray; assumes last recession ended 09Q2. Source: CBO (May 2010), 2010Q2 2nd GDP release, NBER and author’s calculations.
I wouldn’t argue with you or Bartlett that the Bush years were great, they weren’t. But they are in the past.
Does reminding us over and over again just how many bad decisions were made in such a short amount of time really provide any clue as to how we should proceed?
I’d be tempted to say we should just do the opposite of Bush, but President Obama doesn’t seem to agree with that (see Afghanistan).
Menzie is using the playbook from The One Himself: when everything Obama does is a complete disaster, start talking about GWB.
“My predecessor…”, “I inherited…”, “the ones who made this mess…”
It’s got to be nice to be President without having to take responsibility for anything 18 months into your term.
Obama apologists need to wake up and realize that nobody liked the Bush policies. But the Obama Administration is Bush on steroids: bigger deficits, bigger bailouts, closer ties to Wall Street, more government meddling in every aspect of the economy, more incompetence in the Gulf…
Wow. Delusion is grand.
I’d refine the list to overspending on Iraq, Medicare part D, no vetos, Sarbanes-Oxley, ag subsidies, signing McCain-Feingold, neutering SecTreas and GSEs, letting the media have its way with him.
Move on.
Good that your focus on politics is becoming clearer! You might want to change the name from Econbrowser in due course, though.
Keep it up; Krugman might need replacing if he blows a valve after November. Wouldn’t it be fun if Obama succeeds in splitting off the liberal wing of the Dems? Or the Dems just implode?
So? What’s the point? What exactly do we learn? That politicians screw up? That is supposed to be news? Again, what exactly do we learn here in this supposed Macroeconomics Blog?
Dateline Feb. 24, 2001, AP story via CBSNews (http://www.cbsnews.com/stories/2001/02/24/national/main274334.shtml), quoting GWB:
“After paying the bills, my plan reduces the national debt, and fast….So fast, in fact, that economists worry that we’re going to run out of debt to retire. That would be a good worry to have.”
As one who supported George Bush and still understand his economic policies, until he entered his unholy alliance with Henry Paulson-Goldman Sachs and Keynesians, were moving our economy in the right direction.
That said it is important to understand the thinking of the ruling elite, so an article like this is very important. To understand the concept of the ruling elite read this great article http://spectator.org/archives/2010/07/16/americas-ruling-class-and-the/print the go back and read Bartlett. Also read Menzie’s posts with the article in mind.
And I’d add to the list the TSA.
For those who are calling on Menzie and Barlett to “bet over” the Bush era, I’d remind you that the thing which has brought the Bush record back to their attention is not their own delight in contemplating a dark era in US history. It is that the GOP has decided to rehabilitate Bush and make his record part of their campaign. So please, take that “get over it” message where it will do some good. Take it to Republican campaign rallies and shout it good and loud when Republican candidates get all wistful about Bush.
Otherwise, this looks like just another effort to insulate GOP talking points from response. If the GOP wants to bring back Bush-era policies, then those who found Bush-era policies dreadful, criminal, corrupt and disastrous for the future of the US can’t afford to gratify trolls insistence that we just ignore the whole thing.
The reason it’s necessary to point out the state of the Bush Administration is that the GOP is distorting facts for the fall election. For example, they have been circulating a story with graphs that say the finances of the country were in decent shape and that the deficit is all Obama. That’s a blunt lie they achieve by conveniently leaving out the last GWBush budget and thus the deficit in that budget. They simply stop counting before the financial crisis, which happened while Bush was in office, and all of the budget changes that occurred while Bush was in office under his budget for that fiscal year. This is why it’s important to revisit this aspect of the Bush years.
As for the rest, consider that Elena Kagan is light years a better candidate for the Supreme Court than Harriet Miers and yet only one GOP senator voted for her in committee. If she’s not qualified – which was a claim by GOP senators – then it’s fair to look at the people they were prepared to approve.
Also note that Medicare D did add a huge unfunded liability, on the order of $5.6T, and that now the GOP is calling for fiscal austerity while blaming the Democrats for running up the deficit (see first point about that). Then note that the national debt doubled under GWBush BEFORE the financial crisis and explain how exactly Bush’s fiscal policies were great. And finally, note that the pre-criss budget deficits ran at over $400B and only improved to $186B at the very top of the business cycle, meaning they never got closer than nearly $200B deficit even when the economy was at a bubble peak. Compare that fiscal record to Clintons’ because his fiscal policies generated an actual budget surplus.
Since Menzie Chinn wants to transform this Econbrowser Blog into a “It-Is-All-Bush’s-Fault” Blog, I am going to chip in with the following:
In his famous Playboy Magazine interview from 1973 (or so), Milton Friedman (a famous macroeconomist, you know?), among the many things, he discusses the Wage & Price Controls (WPC, for short) that President Nixon imposed around that time. Friedman is very emphatic (go back and read the interview) in saying that Nixon had opposed these WPCs, that there is so much the President can do, but if the voting public wants it, Friedman says, “it would be irresponsible not to bow to public opinion” (or something like this, I am paraphrasing). That is, in a democracy, if the voting public wants it, you can try to persuade and oppose, but eventually, if the public STILL wants it, you have to bow to the wish of the voting public.
Why do I say this? Because, Menzie is forgetting the difference between Bush and Obama. Bush did not WANT the Medicare D program; but the voting public wanted it (especially, the elderly, who are a huge voting block). It would have been irresponsible (following M. Friedman) not to enact it eventually.
Obama willfully enacted laws that are detrimental, they are in his thinking. It is not that Obama wanted prudent and responsible economic policy-making; no, Obama enacted the stimulus, the useless health-care reform, the useless financial reform, *willfully*. A huge difference with Bush II.
Minzie, you’re sounding rather partisan. If you’re trying to show the structural deficity “really isn’t Obama’s fault” you probably have a tough road to travel. GW did more than his fair share of adding to the structural deficit. But not even half way through his first term Obama is on track to eclipse him. HC Reform is a HUGE new entitlement program…..probably larger than all of the structural deficit spending under GW combined.
“failing to push for tougher oversight of Fannie Mae and Freddie Mac”
Can’t let that one slip by without a fact check.
From none other than the liberal rag, The New York Times,
————————————–
Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
“These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
————————————-
Libs in Congress get credit for seeing to it that GSE’s remained the workhorse of providing mortgages to those who didn’t deserve it. Thus, libs get the credit for the housing meltdown.
Here’s the link for my last quote from the 9/11/2003 NY Times –
http://www.nytimes.com/2003/09/11/business/new-agency-proposed-to-oversee-freddie-mac-and-fannie-mae.html?sec=&spon=&pagewanted=all
But Menzie mocked Sarah Palin in 2008 for being so stupid as to suggest that Fannie and Freddie would cost the taxpayers anything.
Wow, more conservative/realists out there and commenting than I expected. KHaris’s trolling I expect, but I really thought to see this become an echo chamber of Bush bashing. I also think that’s what Menzie expected. It is of course, still early in this thread.
Jeebus tj, I wish you wouldn’t have brought up that NY Times quote. Y’ano, we don’t need to be reminded that it wasn’t just Bush that caused this great recession, at least not at this time, on this blog.
BTW, the sharing of blame for the bursting of that ole housing bubble, kinda negates a large portion of the blame. As always with that last comment YMMV!
You know what’s funny? Conservatives agree that a lot of these policies sucked.
That’s why Harriet Miers isn’t a Supreme Court justice, for example. It wasn’t liberals who derailed her nomination, after all.
I agree with these: Medicare Part D, Sarbanes-Oxley, Harriet Miers, no vetos until second term, tax rebates+credits and nonpermanent tax cuts, steel tariffs, ag subsidies, compassionate conservativism, signing McCain-Feingold after threatening to veto, neutering SecTreas, and GSEs.
When a discipline has been so thoroughly discredited as macroeconomics has over the last couple of years, what is there left for practioners whose human capital is destroyed to do except throw up a smokescreen of political diatribes to distract what is left of the audience?
So, just to get things straight. Menzie (and Bruce) note that the GOP is trying to rehabilitate Bush. CoRev’s fellow travelers encourage us to ignore the rehabilitation effort, mostly by pretending that Menzie just brought up the Bush record for no good reason, rather than in response to a GOP effort to rehabilitate Bush. I point out that recounting Bush’s many flaws and failures is a response to political spin from the GOP, and CoRev calls me a troll.
So, let’s just be clear. CoRev hang out on economic blogs, making himself part of the conversation, apparently in the hope that familiarity will breed more acceptance than contempt. CoRev is, however, a profoundly dishonest person, engaging in many of the textbook push-back tricks that lower forms of political operatives are wont to employ. Bush era bullies accused people who didn’t want to engage in an illegitimate war “traitors”. CoRev calls people who insist on honesty “trolls”. The same basic technique. CoRev just fills in the black to fit the situation.
Now, on to substance, or what tries to pass itself off as substance. Bush did not oppose Part D all the way along. In the end, he supported it, but did not support paying for it. Guest seems to have missed the fact that Part D is expensive, and Bush made no effort to pay for it. He also lied about its cost and threatened the job of a government employee who tried to tell the truth. This is the Bush that the GOP wants to rehabilitate for the purpose of regaining power for themselves. This is the man whose rehabilitation we are asked to ignore, ’cause it’s just Menzie being partisan. How dishonest are you lot willing to be?
Bruce, Menzies, and yes, even KH are using the traditional misdirection strategy so that we will not pay attention to the reality of the Obama policy failures. Moreover, with the latest poll results and current Sherrod, economic, unemployment issues in the forefront it is critical to change the subject. An added benefit is that the attention on Bush motivates the Dem base.
Bush made mistakes. We all do. Most learn from them, correct, and then go forward. There is little confidence that Obama (and his advisers), and the Dem leadership have learned any lessons. They continue to write horrible legislation, fail to give the time for anyone to read it before calling for the vote, and bury little gotchas in them. (You do know that with the Healthcare Bill we are now obligated to pay 3.8% sales tax on house sales over $500K for those with income over $250K? Don’cha?)
So, for heaven’s sake don’t pull back the curtain. What you see will be too frightening.
Nasty, nasty! Go for it, kharris! Bush lied; soldiers died! What a commentator! Bring on the tin foil hats!
I think that we need a full Congressional investigation into the Crisis of 1907. The role of Bush in causing it has never been explained to anyone’s satisfaction.
The president is one guy. Congress has to pass legislation. I agree the the Bush Administration and the Republican controlled congress, for 4 of those years, should be faulted for some things – not pushing hard and loud enough on GSE oversight and the same with SS reform. Medicare Part D should be a model for Health Care reform. Lets properly fund it and apply the procedures to the rest of Medicare. The last article i read on it showed it coming in almost 20% below projections ($49B projection, $41 B actual). Iraq. The same folks saying it was a mistake, would be screaming about Bush if an attack had occurred.
Mr. Bartlett lost his conservative credentials along time ago. He is a RINO looking for attention.
It is easy to bash Bush, but in the end it is the dimocrats that benefit.
Here is the link to the article. I am not sure if it is still active.
http://online.wsj.com/article/SB10001424052748703746604574461610985243066.html
Tired of defending the disastrous policies of this Administration and this Congress, Menzie and Bruce and kharris set up a straw man that “Republicans are trying to rehabilitate Bush.”
Nothing could be further from the truth. A couple of Texas Republicans made ill-advised pro-Bush remarks on TV which were immediately disowned by party officials.
To some, this is apparently adequate evidence of a grand Republican plan. You really have to be a delusional leftist to think the GOP actually 1) thinks Bush’s economic policy was good, or 2) thinks reminding people about Bush is good electoral strategy.
It appears some people get a lot of their (mis)information from left-wing internet echo chambers like Daily Kos and Huffington Post, which are cackling with glee at the supposed Republican plan to rehabilitate Bush.
A little common sense would go a long way if you insist on reading those sites.
Or better yet, we could actually have an intelligent discussion about economics instead of inane, hyper-partisan nonsense.
W.C. Varones: Hmm, reasoned analysis like this?
Sound familiar. I hardly think you are in a position to argue for calm, reasoned, analytical discourse.
Bruce, Menzies, and yes, even KH are using the traditional misdirection strategy so that we will not pay attention to the reality of the Obama policy failures. Moreover, with the latest poll results and current Sherrod, economic, unemployment issues in the forefront it is critical to change the subject. An added benefit is that the attention on Bush motivates the Dem base.
Bush made mistakes. We all do. Most learn from them, correct, and then go forward. There is little confidence that Obama (and his advisers), and the Dem leadership have learned any lessons. They continue to write horrible legislation, fail to give the time for anyone to read it before calling for the vote, and bury little gotchas in them. (You do know that with the Healthcare Bill we are now obligated to pay 3.8% sales tax on house sales over $500K for those with income over $250K? Don’cha?)
So, for heaven’s sake don’t pull back the curtain. What you see will be too frightening.
Now this is just getting embarrassing. Senior Dems are supporting a blanket extension of the Bush tax cuts. Y’ano, that tax cut they claimed was for the RICH!!????
Here’s one article: http://news.yahoo.com/s/nm/20100721/pl_nm/us_taxes_conrad_3
I had to go back to the top to see if Menzie/Bruce had listed them. Yup!
TJ, the article you linked to has a date of 2003/09/11
The Republicans controlled congress then.
Between 2002 and 2005, the GSE’s lost half their market share to Wall Street. Look at the stock price. It plunged during that time while the big banks were reporting record profits from the housing bubble.
Ridiculous to put all the blame on the democrats. GSE’s contributed to the bubble but were hardly “the workhorse.” We wouldn’t have had a Wall Street meltdown had they been the workhorse.
laugh said: “TJ, the article you linked to has a date of 2003/09/11
The Republicans controlled congress then.”
Yup! This was the make up of the Senate:
108th Congress (2003-2005)
Majority Party: Republican (51 seats)
Minority Party: Democrat (48 seats)
Other Parties: Independent (1 seat)
Total Seats: 100
And the House was:
108th 2003-2005
Total —- Dems —-Repubs
435 —– 205 —- 229
Now that’s control. Eh?
Care to compare to today’s congress?
Menzie,
I think the link you meant was this.
I stand by that comment. In fact, I’m rather proud of it as it concisely pointed out what was wrong with the stimulus.
I think it’s been proven right as we’ve now blown through almost a trillion dollars of pork largely on public sector employees, and a year and a half later there is no private sector job recovery in sight.
As to the broader point of partisanship, I think you’ll find me an equal-opportunity critic of bad economic policy (see Analogies, worst President in recent history, etc.).
It’s my sense that some economic bloggers, and I certainly include Paul Krugman in this, are driven more by partisanship than by economics. Bush deficits bad, Obama deficits good. Medicare Part D bad, ObamaCare great.
Economic bloggers would have more credibility if their economic beliefs were more consistent than their party allegiances.
CoRev: Where do you get this stuff? Oh wait, I can tell that you’ve been watching Fox News because a lot of what you’re saying is coming right out of their playbook.
Fannie Mae and Freddie Mac did not cause the housing collapse. Fannie Mae and Freddie Mac certainly got caught up in the housing collapse, but that’s very different than causing it. The cause of the housing collapse was in the unregulated private quasi-banks. Fannie Mae and Freddie Mac eventually started playing the same game in order to keep from losing market share, but by that time the housing collapse was already baked in the cake. Fannie Mae and Freddie Mac were latecomers to the party. This issue has been studied to death by actual economists, who unlike the gasbags on Fox actually understand economics.
As to extending the Bush tax cuts, I don’t know of any prominent economist who supports full repeal of the Bush tax cuts during a very nasty recession. I realize that you do not have any formal training in economics, but I’m still amazed that even after hanging around various econ blogs for lo these many years you still do not seem to grasp the basics of Macro 101. We need to repeal the Bush tax cuts as part of a larger solution to the long run structural deficit; but the immediate problem is weak aggregate demand so we want to run a cyclical deficit. It is because of Bush’s huge deficits during the “fat years” that we have so little wiggle room now when we really need to be running much larger deficits.
You said that Bush made mistakes, but we all do and we learn from them. Well, Bush actually used to brag about not learning from his mistakes. He prided himself on never going back and asking himself if he made the right decision. Bush’s phrase was that he “never negotiated with myself.” That’s Texas Dumb.
And you never addressed the main points brought up by Bruce Barrett, Menzie and kharris. The issue is the coordinated effort to rehabilitate Bush’s record. Just the other day Mitch McConnell was downright misty eyed over the golden era of Bush 43. Bush was a failed President and the GOP’s efforts to try and rewrite history just so that they can fool a few more voters in November ought to be called out. The point of Bruce Barlett’s post and Menzie’s post was not to bash Bush, it was to unmask the GOP’s political tactics of trying to paint the Bush years as some golden era.
Various: “Reform is a HUGE new entitlement program…..probably larger than all of the structural deficit spending under GW combined.”
A little fact checking before you post might be a good idea. The healthcare reform bill actually reduces government spending by roughly $100B over the next 10 years and then ~$1T over the following 10 years according to the CBO. If that’s what you call an “entitlement” then perhaps we ought to have more of them. The one thing that would have made a big dent in the deficit were the various Medicare reforms that were initially bundled with healthcare; but the GOP decided to use those reforms to scare up the grandma vote with goofy talk about death panels and all that crap.
2slug,
You’re forgetting about the Doc Fix. Pelosi et. al. rammed this past the CBO insisting that they were going to drastically cut payments to Medicare doctors. Everyone knew that was a lie, but the media largely let them get away with it.
Now the Doc Fix is back and ObamaCare increases the deficit — and even that is based on some very rosy assumptions about health care consumption and costs.
You should stick to economics, Menzie. Or leave the blog to Hamilton – his posts are more serious.
To 2slugbaits:
Even the CBO does not believe its own estimates about cost reductions of healthcare.
See CBO April 2010, presentation, slide 11:
“Cost estimates do not include any effects of legislation on overall output…”
http://www.cbo.gov/ftpdocs/114xx/doc11439/WHCC_Presentation-4-12-10.pdf .
CBO, under Congressional guidelines, does a static analysis. It assumes that whatever Congress passes, the economy will not be affected positively or negatively. Many dynamic economic models, that allow for changes to the economy, found that the healthcare law would negatively impact employment and the economy, and consequently lower tax revenues, increase social program outlays, and increase the deficit.
The most basic reason is that, while the healthcare law may make needed changes to health insurance and increase medical coverage, it is increasing the cost of labor to business and the cost of doing business.
A basic economic principle is that when you increase the cost of something, directly or through taxes, you use less of it.
Fewer workers means higher unemployment and lower GDP.
There are so many good points to discuss, so Ill just pick my favorite: Sadam. Does anyone really disagree that the current situation in Iraq is not better for our national interest then before the war? Sadam was continuously stirring up trouble throughout the region; remember Osrak his aborted nuclear pathway to weapons of mass destruction. We might debate what this worth, and if the price we paid is too much, but it is hard to argue that if Sadam were still the dictator of Iraq that we would be better off in fact no one except Sadam would be better off.. Thus, there is a benefit to being rid of him and having the green shoots of democracy in Iraq; in 30 years of dictatorship Sadam killed 20,000,000 people in the region. Since the war, nowhere near that number of people has died at the hands of the Iraq government or even including all of the dissident organizations including Al Qaeda.
I guess the more things change the more they stay the same… News flash to the Obama administration: It’s your mess now.
“Ramming through a massive new, unfunded Medicare drug benefit when the system was already broke.”
https://econbrowser.com/archives/2010/03/speaking_of_lia.html
The indispensable Jim Glass points out that the Democrats wanted to spend even more on Medicare part D. Regardless, the Dems signed on to Medicare part D enthusiastically.
~~~
“Rushing to enact the hugely expensive Sarbanes-Oxley Act in reaction to the Enron scandal even though there was no evidence that it would have prevented it from happening.”
Another example of finding out what’s in the law after its been signed. Only time will tell with FinReg. With Barney “Fleet” Frank & Chris “Countrywide” Dodd involved FinReg has my full confidence.
~~~
“The total failure to deal with Katrina.”
Check; BP oil spill
~~~
“Nominating the totally unqualified Harriet Miers to the Supreme Court and appointing other nincompoops to high level positions solely on the basis of slavish loyalty.”
Elana Kagan, Eric Holder; check
All of the above about focusing on the past serves to be nothing more than a premeditated distraction. This country has issues; let’s focus the actions taken by the current administration to resolve these issues.
2slugs, sigh! Like KH and to a lesser extent Menzie, you attack the person and not the point. When that happens we can tell how accurate was the comment.
Apparently, what you do not want to admit is the content in charts in this thread: https://econbrowser.com/archives/2010/07/a_comment_on_ke.html
They clearly show the difference in RESULTS between administration policies. The comments, so far, on this thread also show that attacking Bush is not a winning formula for the upcoming elections. And, the election is the issue portrayed in this article.
Does that answer Bruce’s, Menzies’s, KH’s and your point re: Bush. It’s not our view points that are not supported, but your own.
W.C.Varones
“I think it’s been proven right as we’ve now blown through almost a trillion dollars of pork largely on public sector employees, and a year and a half later there is no private sector job recovery in sight”
First, setting aside what you mean by “largely” you have not explained why it is a bad thing that stimulus dollars go to public sector employees rather than private sector employees. If you believe that government intervention skews factor inputs and all that, then isn’t this an argument for consciously directing stimulus dollars towards the public sector because that has less of a distorting effect? The rationale for the stimulus, which most conservatives still don’t seem to grasp, is to beef up the aggregate demand side of the problem. We are not looking at an aggregate supply problem…this is not 1978.
And the stimulus has more or less worked as planned, the problem was that the plan was never to bring the economy back to full employment. That was by design thanks to Larry Summers, who only wanted a small stimulus package that would stop the bleeding and then allow the economy to gradually recover to full employment. The stimulus actually did what was planned. The problem was that the plan itself was wrongheaded. Larry Summers is a very smart guy, but his judgment has always been suspect, and I think his idea for an anemic stimulus was just further proof that he belongs behind ivy walls and not in a govt office.
“Bush deficits bad, Obama deficits good. Medicare Part D bad, ObamaCare great.’
Bush deficits were bad because they were structural deficits. Obama’s deficits are good (indeed, not large enough) because they are cyclical deficits. Learn the difference. Afterall, this is an economics blog so it shouldn’t be too much to ask participants to at least demonstrate some basic competency in economics. And Medicare Part D was bad because it not only blew out an unfunded hole in the budget, but it actually aggravated the problem of skyrocketing healthcare costs. Obama’s healthcare reform actually lowers the government’s cost by ~$100B over the next 10 years. The fiscal savings would have been more except the GOP demanded that further efficiencies in Medicare had to be taken out of the bill because those savings hurt GOP constituencies (rich doctors, “Scooter Store” businesses, and insurance companies).
2slugs, sigh, even again. All the arguments to make a failed policy good. You’ve seen me write many times now, the Dem policies are just cruel. Why are we discussing the goodness of maximizing the pain and suffering caused by this recession?
Blame it on Summers if you will. We blame it on Obama, and even to a lesser extent you and your ilk. You actually believed that this kind of stimulus would in the long run optimize improvement. While in the long run you might be proved correct, you totally ignore that pain and suffering issue in the interim. Ignoring that issue for the political gain? Callous, uncaring and really poor strategy. Course YMMV, until November, that is.
It’s worth a Sheesh, 2slugs.
2slug,
I’m afraid the gulf between our worldviews is too vast for us to have a meaningful discussion.
If you believe:
– that Obama’s deficits are purely cyclical, not structural
– that ObamaCare will reduce the deficit, ignoring the doc fix and other flawed assumptions
– that a sustainable, healthy economy can be built on government growth while the private sector dries up
– that Republicans actually want to run on the Bush record
… then there’s really nothing more I can say.
Best regards,
W.C.
corev,
When Republicans a have slight majority in congress the libs yell, “BLAME THE REPUBLICANS!”.
When the libs have an overwhelming majority in congress the libs yell, “BLAME THE REPUBLICANS!”
I wonder who will get the blame in a few years when we reflect on the Obama years and the heaping helping of progressive regulations imposed on us by Obama appointees.
Serious question – When did congress abandon its responsbility of actaully writing the rules that acompany the bills they pass, and delegate that authority to presidential apponitees within the various federal agencies?
Obama has stacked these agencies with some folks who are uber left, so it will be interesting to see the actual policy/regulation that emerges. I suspect years of court battles over the constitutionality of new agency policy, an economy weakened by a level of “unusual uncertainty” (Bernanke), and the anemic level of job creation that results.
From Investors’ Business Daily:
The Tax Tsunami On The Horizon
Fiscal Policy: Many voters are looking forward to 2011, hoping a new Congress will put the country back on the right track. But unless something’s done soon, the new year will also come with a raft of tax hikes, including a return of the death tax, that will be real killers.
Through the end of this year, the federal estate tax rate is zero, thanks to the package of broad-based tax cuts that President Bush pushed through to get the economy going earlier in the decade.
But as of midnight Dec. 31, the death tax returns, at a rate of 55% on estates of $1 million or more. The effect this will have on hospital life-support systems is already a matter of conjecture.
Resurrection of the death tax, however, isn’t the only tax problem that will be ushered in Jan. 1. Many other cuts from the Bush administration are set to disappear and a new set of taxes will materialize. And it’s not just the rich who will pay.
The lowest bracket for the personal income tax, for instance, moves up 50% to 15% from 10%. The next lowest bracket 25% will rise to 28%, and the old 28% bracket will be 31%. At the higher end, the 33% bracket is pushed to 36% and the 35% bracket becomes 39.6%.
But the damage doesn’t stop there.
The marriage penalty also makes a comeback, and the capital gains tax will jump 33% to 20% from 15%. The tax on dividends will go all the way from 15% to 39.6% a 164% increase.
Both the cap-gains and dividend taxes will go up further in 2013 as the health care reform adds a 3.8% Medicare levy for individuals making more than $200,000 a year and joint filers making more than $250,000. Other tax hikes include: halving the child tax credit to $500 from $1,000 and fixing the standard deduction for couples at the same level as it is for single filers.
Letting the Bush cuts expire will cost taxpayers $115 billion next year alone, according to the Congressional Budget Office, and $2.6 trillion through 2020.
But even more tax headaches lie ahead. This “second wave” of hikes, as Americans for Tax Reform puts it, are designed to pay for ObamaCare and include:
The Medicine Cabinet Tax. Americans, says ATR, “will no longer be able to use health savings account, flexible spending account, or health reimbursement pretax dollars to purchase nonprescription, over-the-counter medicines (except insulin).”
The HSA Withdrawal Tax Hike. “This provision of ObamaCare,” according to ATR, “increases the additional tax on nonmedical early withdrawals from an HSA from 10% to 20%, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10%.”
Brand Name Drug Tax. Makers and importers of brand-name drugs will be liable for a tax of $2.5 billion in 2011. The tax goes to $3 billion a year from 2012 to 2016, then $3.5 billion in 2017 and $4.2 billion in 2018. Beginning in 2019 it falls to $2.8 billion and stays there. And who pays the new drug tax? Patients, in the form of higher prices.
Economic Substance Doctrine. ATR reports that “The IRS is now empowered to disallow perfectly legal tax deductions and maneuvers merely because it judges that the deduction or action lacks ‘economic substance.'”
A third and final (for now) wave, says ATR, consists of the alternative minimum tax’s widening net, tax hikes on employers and the loss of deductions for tuition:
The Tax Policy Center, no right-wing group, says that the failure to index the AMT will subject 28.5 million families to the tax when they file next year, up from 4 million this year.
“Small businesses can normally expense (rather than slowly deduct, or ‘depreciate’) equipment purchases up to $250,000,” says ATR. “This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be ‘depreciated.'”
According to ATR, there are “literally scores of tax hikes on business that will take place,” plus the loss of some tax credits. The research and experimentation tax credit will be the biggest loss, “but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs.”
The deduction for tuition and fees will no longer be available and there will be limits placed on education tax credits. Teachers won’t be able to deduct their classroom expenses and employer-provided educational aid will be restricted. Thousands of families will no longer be allowed to deduct student loan interest.
Then there’s the tax on Americans who decline to buy health care insurance (the tax the administration initially said wasn’t a tax but now argues in court that it is) plus a 3.8% Medicare tax beginning in 2013 on profits made in real estate transactions by wealthier Americans.
Not all Americans may fully realize what’s in store come Jan. 1. But they should have a pretty good idea by the mid-term elections, and members of Congress might take note of our latest IBD/TIPP Poll (summarized above).
Fifty-one percent of respondents favored making the Bush cuts permanent vs. 28% who didn’t. Republicans were more than 4 to 1 and Independents more than 2 to 1 in favor. Only Democrats were opposed, but only by 40%-38%.
The cuts also proved popular among all income groups despite the Democrats’ oft-heard assertion that Bush merely provided “tax breaks for the wealthy.” Fact is, Bush cut taxes for everyone who paid them, and the cuts helped the nation recover from a recession and the worst stock-market crash since 1929.
Maybe, just maybe, Americans remember that and will not forget come Nov. 2.
W.C.Varones: Way most of the deficit is cyclical. The deficit started to jump in the last year of the Bush Administration when the economy tanked. Obama has added about $300B a year to that cyclical deficit. The rest is structural and is carryover from the Bush Administration. A good way to gauge how much is structural is to look at the CBO’s outyear projections when the economy is assumed to be at full employment. Look at the data, virtually all of what Obama has added is cyclical…and I’m assuming that you actually know the difference between structural and cyclical deficits.
No one said that the GOP wanted to run on Bush’s record, what was said was that the GOP wanted to run on a rewritten version of Bush’s record. That’s the point of Bruce Barrett’s post and Menzie’s post and kharris’ post. That’s why McConnell has been peddling this fairytale version of events that conveniently drops off the deficit under Bush’s last year.
The healthcare reform bill will still reduce the deficit even after all of the adjustments. And even with all of its flaws it is still a better bill than anything the GOP had to offer, which actually increased the deficit according to the CBO.
With Saddam’s army next door, we had no ground to stand on in dealing with Iran. That alone almost justifies the war.
I am not a RINO; I left the Republican Party some years ago and now consider myself to be an independent.
Milton Recht: “The most basic reason is that, while the healthcare law may make needed changes to health insurance and increase medical coverage, it is increasing the cost of labor to business and the cost of doing business.”
First, there’s another economic principle that you either don’t know or you have forgotten, and that law says that input factors with more elastic demand curves relative to the supply curves for inputs are able to shift the costs of a new tax onto the input factor with the inelastic curve. That’s why employees pay the full FICA tax even though employers nominally pay half. It’s the difference between tax impact and tax incidence. Micro 101. And the costs of healthcare reform will come out of the wage bill. That does not mean it increases unemployment over the long run, but it does mean that workers will be bearing the economic cost of healthcare. Second, I certainly don’t like the idea of employer based healthcare…it is inherently inefficient and leads to perverse economic incentives, but it’s the GOP that seems wedded to employer based healthcare and not the Democrats. If you want a healthcare system that causes less economic distortion of labor costs, then go to a Canadian style system.
As to your point about the CBO not believing its own estimates, well it’s certainly true that CBO only does a static analysis, but you have to compare things against an alternative and the alternative was business as usual. The healthcare bill is still a work in progress, but I give it credit for being better than the status quo and far better than any of the braindead ideas offered by the GOP. The one exception is that GOP Sen. Tom Coburn actually did offer some fairly constructive changes…but the voices shooting down his ideas were Republican and not Democratic. It was McConnell that silenced Coburn.
CoRev: “While in the long run you might be proved correct, you totally ignore that pain and suffering issue in the interim. Ignoring that issue for the political gain? Callous, uncaring and really poor strategy. Course YMMV, until November, that is.”
You’ve got to be kidding me. So now we’re supposed to believe that extending unemployment compensation is cruel and shutting off benefits is kind. Now we’re supposed to believe that laying off teachers and cops and firemen is not only responsible policy, but an act of caring. And your economic “theory” tells you that stuffing more money in a mattress is the cure for a deep recession. Ugh! Obama’s policies have performed almost exactly as advertised. The effect on GDP has tracked very closely with what was predicted months before the stimlus bill was passed. The problem is and always has been that the policy itself was only a half-measure and was never big enough to fix the unemployment problem. The Obama plan actually followed what Republican economists were saying, which was to devise a plan that would restore GDP growth but one that was not designed to shock the system into higher employement levels.
The real callousness is coming from folks like Grassley who was caught on tape bragging to his constituents about how he fooled Harry Reid into thinking that he might play along with healthcare reform but all along he was just playing a stalling game. Or Sen. DeMint who admitted that it wasn’t about individual issues but was instead all about defeating Obama for the sake of defeating Obama. It was supposed to be Obama’s “Waterloo” that would help the GOP win in 2010. DeMint even admitted it. Or what about those RNC Powerpoint slides that got left behind in a hotel room that outlined how the GOP intended to callously manipulate low information voters?
>btj: Serious question – When did congress abandon its responsbility of actaully writing the rules that acompany the bills they pass, and delegate that authority to presidential apponitees within the various federal agencies?
Serious answer: during the Reagan Administration. The first six years of the Reagan Administration the Senate was held by Republicans and they made a big effort to dead end legislative regulations by shifting enforcement and interpretation to Reagan appointed regulators. At the time Republicans thought this was a good idea and they used to brag about it. So that’s your answer…it pretty much got started during the Reagan years.
2s, the size of med d makes it ridiculous, but it was the best of a bad set of options. There was going to a
be major health bill. Research showed spending on drugs reduced spending on procedures and visits 2:1. Of course thinking that relation would hold when scaled, or even over time (drugs probably shift spending to the future rather than replace it) was also ridiculous.
2slugs, let me ditto WCV’s comment. To think you believe what you write is actually frightening. Who was it that just said that macro-econ was a lost study (or something to that effect?)
Moreover you said this: “Serious answer: during the Reagan Administration.” Actually no. Most legislation closes with a phrase that authorizes the executive to write the appropriate regulations, and that has been standard for many decades. What is different with this administration is the multi-thousand page legislation with everything including the kitchen sink thrown into them, with the review time so short to make them unreadable .
aaron: That’s not really germane to the Medicare Part D issue. The issue wasn’t whether or not we needed some kind of new balance between drugs and visits/surgeries; the question on the table was the way it was financed…or rather not financed and the way in which the Bushies made a concerted effort to make sure that Big Pharma profits were safe. That was the scandal.
CoRev: If you are referring to Paul Krugman’s comment, then I think you’ve mangled his quote and his intent. When Krugman referred to the Dark Age of Macroeconomics he did not mean that macroeconmics had nothing to say, he meant that Univ of Chicago and (to a lesser extent) many New Keynesian economists had forgotten what an earlier generation of economists had once known, in the same way that Dark Age Europe had forgotten what the ancients had known. When Krugman talks about Dark Age economists he has in mind many of the economists who are quoted regularly on Fox News. Personally I think Krugman is way too focused on academia. What I find distressing is the absolulte cluelessness out there in the general public about basic economics. Granted, I went to a priveleged high school, but when I took economics we used Paul Samuelson’s book and it was taught by (believe it or not) a guy who got his PhD from Univ of Chicago. A rare thing to find a freshwater educated economist who understood saltwater economics. But Krugman’s point is that you won’t find that today. Freshwater economists are largely clueless about an earlier tradition and as a result they keep making the same mistakes. And I suppose that’s true in high school econmics classes today where people learn even less about economics. So if academics are clueless I guess I shouldn’t be too surprised that low information Fox News viewers are even less tuned in.
Yes, I am well aware that there has always been a great deal of discretion left to regulators, but my point was that it really accelerated under Reagan. For example, under Nixon the EPA largely put through changes by way of regulation, but under Reagan you started to see regulators make decisions to NOT enforce rulings. And right before they left office both Reagan and Bush 43 jammed through a lot of new regulations without benefit of legislation. That’s one reason why the Obama Administration decided to invoke a law from the Reagan abuses that imposed a freeze on any regulations issued during the last year of a prior Administration. That law was a result of the Reagan abuses.
Just to follow up on the IBD column, the Obamaistas claim that they will let the Bush tax cuts “for the wealthy” expire. But they imply that they will keep them for the proles.
But haven’t they failed to actually, you know, pass laws to keep the cuts for the proles? As the law stands right now, isn’t IBD right and ALL the tax cuts are set to expire?
And when exactly is Congress going to get around to making the cuts for the proles permanent? Aren’t they running out of time?
Alls I know is that, if the bottom rate goes to 15%, and the middle rate goes to 28%, and the child tax credits go awy… my tax bill next year is going to be astronomical.
Buzzcut: So who are you blaming, Obama or Bush? Afterall, it was Bush’s decision to not make the tax cuts permanent, and Bush did that because that was the only way that the Republicans could push through their dishonest accounting gimmicks. Under the budget rules the tax cuts couldn’t be permanent because the numbers blew up after 10 years. Bush gambled that the GOP would be in office forever and would be able to make the tax cuts permanent when they had a big majority in the Senate. But like a lot of his gambles, Bush lost the bet.
So if Democrats offer up an extension of the tax cuts for households making less than $250K, will the Republicans try to filibuster it? You’re tuned into the GOP…what will McConnell do?
Eventually everyone’s taxes are going to have to go up; that’s just a fact of life. The argument for delaying part of the increase is because of the fragile state of the economy right now. But sooner or later (and hopefull sooner) the economy will recovery and we can all get about the business of paying more in taxes in order to bring down the debt and shrink the deficit. And you do want to shrink the deficit, don’t you?
2slugs, you’ve been caught out misstating (a kinder explanation) the way legislation is framed, leaving the implementation of regulations to the Executive Branch. But this statement proves you are being disingenuous, or just plain lying to make a point. You said this: “That’s one reason why the Obama Administration decided to invoke a law from the Reagan abuses that imposed a freeze on any regulations issued during the last year of a prior Administration. That law was a result of the Reagan abuses.”
No, no, no!!! Stop the BS! Obama did what nearly every changing administration does. He (actually Rahm Emanuel) issued an EXECUTIVE ORDER to stop the implementation of any ongoing regulation in order for them to undergo a legal and policy review. No law, and not caused by any Reagan effort.
Why, why do you and many other liberals need to exaggerate (another kinder definition) to make a point. You appear to be so ideologically biased to not even recognize when you do it. Or, of course, you might just be so accustomed to discussing issues with those who agree that they do not or will not question or object.
That’s another Sheesh!!! I dunno if 2 in one day is a record, but it is approaching one if it is not.
Rahm Emmanuel can issue Executive Orders? You mean his signature is on the document? Inquiring minds want to know.
Menzie,
Posts and headlines like these will only attract trolls.
CoRev, Menzie Chinn,
See below.
WHouse stops pending Bush regulations for review
WASHINGTON | Tue Jan 20, 2009 7:25pm EST
WASHINGTON (Reuters) – President Barack Obama’s new administration ordered all federal agencies and departments on Tuesday to stop any pending regulations until they can be reviewed by incoming staff, halting last-minute Bush orders in their tracks.
“This afternoon, White House Chief of Staff Rahm Emanuel signed a memorandum sent to all agencies and departments to stop all pending regulations until a legal and policy review can be conducted by the Obama administration,” the White House said in a statement issued just hours after Obama took office.
The review is a tool commonly used by a new administration to delay so-called “midnight regulations” put in place by a former president between the election and Inauguration Day.
Midnight regulations have been heavily used by recent former presidents, including the Democrat Bill Clinton, Republican George H. W. Bush, and most recently, the Republican George W. Bush.
Controversial late rules by the outgoing Bush administration include allowing the carrying of concealed weapons in some national parks and prohibiting medical facilities from receiving federal money for discriminating against doctors and nurses who refuse to assist with abortions or dispense contraceptives based on religious grounds.
Federal law requires a 60-day waiting period before any major regulatory changes become law, so some presidents try to publish new major regulations to ensure they go into effect before the new president’s inauguration on January 20.
Just one more note. Bruce Bartlett very explicitly advocates regressive taxes (a VAT) as a way of maintaining low taxes on the wealthy and corporations. In my opinion, that makes him more of a reactionary than your typical “taxes are an anathema” Republican.
I also note in passing that his list of Bush administration failures notably excludes the largest trade/CA deficits in U.S. (or world) history. He also implicitly blames the financial crisis on F&F. How credible is that?
I do agree with Mr. Bartlett about the dismal notion of working with Teddy Kennedy on NCLB. He should have known the he, and the American people would be taken to the cleaners.
Has anyone reached this point in the thread learned anything that changes their assessment of GWB or BHO?
Menzie and 2slug are liberal.
WC and CoRev are conservative.
End of story.
IIRC Emanuel made the announcement. I’m sure that “O’s” signature was on it. I stand corrected!
“Thinking that Iraqis would welcome liberation”
Well that part happens to be… True. A quote should help.
“Galbraith argues that the US liberated Iraq. Americans like himself were greeted with flowers (an iconic liberation image that was much anticipated by the war boosters).”
The Galbraith here is Peter Galbraith who can not be plausibly accused of being an apologist for Bush.
See also “Blind into Baghdad: America’s War in Iraq. By James Fallows”. A quote
“Iraqis certainly did greet U.S. troops with flowers and kisses,[5] but the honeymoon did not last long.”
Wow! It just gets better and better.
Some suggested new names for this blog:
EconJournolist
RealClearKrugman
EconCaller
Other suggestions, please? Let’s keep this one going!
Hurray for C Thomson, lets fire some neurons.
The EcOnion
Angry Bore
Menzies Global Socioeconomic Anlysis
The Reich Stuff
No-Bush League
Daily Menz
Econtology
Menzingon Post
MSNBC (Menzie’s Snappy New Barack Cheerleading)
Keith Olbermennz
The losing side and their heroes (GOP) make it a practice now to point out Obama’s tendency to refer back to GW as the source of many of our problems. Why shouldn’t he? Americans are such short term thinkers they constantly forget the causes of our disasters, and do so on purpose. The wing nuts were quick to blame Obama for all of our ills, before he even took office. So, they can lump it and face up to the fact that Bush tanked this country. He actually should be facing war crimes charges along with his cronies but I suspect he and Obama made a deal; Bush keeps his trap shut about the Obama presidency and Obama doesn’t send the DOJ to put Bush in cuffs.
CoRev and Peter Schaeffer:
You are confusing two different things. At the very end of the Carter Administration Congress passed a law establishing the Office of Information and Regulatory Affairs (OIRA) under the authority of the Director of OMB. The 1980 Act estaglishing the OIRA was a response to Nixon’s abuse of regulatory authority…and in particular with respect to the EPA. The incoming Reagan Administration used that new law as a vehicle to delay the barrage of midnight regulations that Carter had imposed at the very end of his Administration. That was not the intended purpose of the Act, but that is how it was used by Reagan to reverse Carter’s midnight regulations. In 1996 Congress then established the Congressional Review Act. The Congressional Review Service describes the Act this way:
The Congressional Review Act (CRA; 5 U.S.C. 801-808) was enacted to improve congressional authority over agency rulemaking, and requires federal agencies to submit all of their final rules to both houses of Congress and the Government Accountability Office (GAO) before they can take effect. GAO periodically compares the list of rules that are submitted to it with the rules that are published in the Federal Register to determine whether any covered rules
have not been submitted.
The Act requires that all rules have to first go to the Comptroller of the GAO before those rules can be enacted. The Bush Administration had not been doing that since April 2008 when the OIRA made its last substantive report to Congress. This was because both houses of Congress were controlled by Democrats. The Obama Administration invoked this part of the law to freeze new rules. In other words, the rules promulgated by Bush were not considered legally complete because they had not been vetted in accordance with the CRA. These are the two pieces of legislation that I was referring to.
The part that you are referring to about Rahm issuing an Executive Order extended the freeze to smaller rules and regulations that were subsumed under the “good cause” clause of section 808 of the CRA which exempts certain kinds of regulations beyond the 60 day freeze.
As to tj‘s original point about the abdication of Congressional responsibility, here is what the sponsor of the CRA said:
As more and more of Congress legislative functions have been delegated to federal
regulatory agencies, many have complained that Congress has effectively abdicated its
constitutional role as the national legislature in allowing federal agencies so much latitude in
implementing and interpreting congressional enactments. In many cases, this criticism is
well founded. Our constitutional scheme creates a delicate balance between the appropriate
roles of the Congress in enacting laws, and the Executive Branch in implementing those
laws. This legislation will help to redress the balance, reclaiming for Congress some of its
policymaking authority, without at the same time requiring Congress to become a super
regulatory agency.
KevinM
Has anyone reached this point in the thread learned anything that changes their assessment of GWB or BHO?
If that’s what you’ve taken away from this thread, then I’m afraid you have missed the main point. The issue that Bartlett and Menzie and kharris raised wasn’t that Bush was a lousy President (that was just assumed and not argued). The point of the thread was that today’s Republican party is trying to rewrite history to try and fool voters into thinking that the Bush era was some kind of golden age. That was the takeaway from Menzie’s post. See the difference? The thread is about the attempt to rehabilitate Bush. That’s very different than just shouting back and forth that Bush was great vs Bush was lousy. What we’re talking about here is the GOP’s willingness to fabricate facts to try and rehabilitate the Bush record. And faking the deficit numbers by conveniently charging the deficit in Bush’s last year to Obama is an example of that fakery. Bartlett wasn’t primarily bashing Bush, he was bashing today’s Republican leadership for trying to create a fictional record of what actually happened. Here’s what Bartlett said:
Over the weekend Republicans unveiled their brilliant new political strategy strategy: the George W. Bush years were the good old days and we should go back to them. A stupider strategy is hard to imagine.
He is clearly talking about the GOP leadership and their dishonest attempt to rehabilitate Bush.
Since we’re recommending alternative names for this site, how about: Econ Missionary Work Among Savages.
Look, I’m not interested in Bush v. Obama, I already largely agreed with the Bartlett criticism of Dubya. He was not a conservative, end of story.
Moving forward, it seems to me that the Obamaistas are rolling back ALL of the Bush tax cuts. That’s the situation right this second, right? And there is no movement in Congress to only repeal part of the cuts, right?
I would assume that someone like Bruce Bartlett (or Menzie) would be in the best position to answer these very simple questions.
The most interesting post above is not chhosing up of sides, in the most recent posts, but the introduction of the notion that taxes will increase for everyone next year unless Congress acts. It is no suprise to find that voters want less taxes.
If Obama follows his pledge to not increase taxes on most of us and still get more revenue, he is going to have to be more creative in shaking down the high income earners. They can’t do the whole job BUT, the rest of us would be more accepting of taxes if we saw that the high income earners were ALL paying rather than using tax loop holes to avoid paying.
So the first job, tax wise, is to see that tax loopholes do not allow the rich to avoid taxes.
That leads to a flat tax. No deductions for anything. But only for a portion of the income of the rich. All their earnings under $300,000 use existing rules. All their earnings over $300,000 pay a flat tax with no deductions.
Would this pass muster in the Supreme Court? I would like to find out.
If there is a link between this and the putative topic of Econbrowser, I fail to see it. But then after all, it is half Menzie’s blog and we are just guests.
As is often the case here, the question posed is one calculated to bring out the partisans to engage in futile arguments. However my interest lies more in understanding what is happening.
The GOP has constantly shifted between those that advocate expanding the role of the federal government and those that favor shrinking it. Not surprisingly, the GOP leadership that has held power in Washington is always the group that wants to expand the role of government.
The first big change in my lifetime happened when Reagan completed his insurgent effort to take over the party from the Nixon wing led first by Gerald Ford and then by George H.W. Bush.
The next wave happened in 1994, when Newt Gingrich adopted many of Ross Perot’s ideas in the GOP platform and had a wave election. Unlike Reagan, who started as an outsider, Gingrich made his move from inside.
It didn’t take long for the Republican Congress to start liking to spend other people’s money. Enter George Bush.
Bush’s platform was one of compassionate conservatism, which people learned as time went on meant bigger government.
The first big break with fiscal conservatives came when he pushed through Medicare Part D. Fiscal conservatives in Congress fought tooth and nail to stop it, but their numbers were limited.
Nothing really changed until the grass roots became energized over the one-two punch of Bush’s appointment of Harriet Miers and the attempt by Bush and pro-business Republicans to push through an immigration bill. The grass roots learned that they could push back hard at Washington and win. This was a trial run for the tea party phenomenon.
Today the grassroots activists face, not just a GOP establishment that gives lip service to its ideals, but rather a Democratic establishment that openly disdains them. And its targets are government spending and the rapid expansion of federal power, which are echoes of the Perot platform.
The Tea Parties are working to defeat not only Democrats but also a number of establishment Republicans in primaries. They have already claimed some high-profile scalps, earning the opprobrium of the leadership.
The grass roots should be indebted to Bush for rousing them from their slumber. It will be interesting to see if the leadership heals the breach and takes advantage of the momentum.
2slugs, why? Why are you working so hard to make your FALSE political point? Saying this: “That’s one reason why the Obama Administration decided to invoke a law from the Reagan abuses that imposed a freeze on any regulations issued during the last year of a prior Administration. That law was a result of the Reagan abuses.”
And then following with: “The 1980 Act estaglishing (sic) the OIRA was a response to Nixon’s abuse of regulatory authority…and in particular with respect to the EPA. The incoming Reagan Administration used that new law as a vehicle to delay the barrage of midnight regulations that Carter had imposed at the very end of his Administration. That was not the intended purpose of the Act, but that is how it was used by Reagan to reverse Carter’s midnight regulations. In 1996 Congress then established the Congressional Review Act.”
then later you say this: “And right before they left office both Reagan and Bush 43 jammed through a lot of new regulations without benefit of legislation.”
At this point you have referenced nearly each and every president since Carter as abusers of their regulation creation powers, and cited Congressional actions to maintain their oversight role/control. So I ask again: Why are you working so hard to make your FALSE political point?
It’s the ongoing war between Congress and the Executive due to the separation of powers. Your citing past Republican presidents is just a sign of b-i-a-s and an attempt to direct attention away from Obama’s performance. As were the Bartlett article and his later comment, along with Menzie’s reference to it.
buzzcut: …it seems to me that the Obamaistas are rolling back ALL of the Bush tax cuts.
Strange way to put it because the reason the tax cuts are rolling back is because that was how Bush and the GOP Congress wrote the legislation 10 years ago. So it’s kind of bizarre to charge (or from my point of view credit) the Obama Administration with “rolling back” the Bush tax cuts.
…there is no movement in Congress to only repeal part of the cuts, right?
No, I don’t think that’s right. I don’t think there is anyone in Congress who believes that all of the tax cuts should be allowed to expired. And I don’t think you’ll find many economists who believe all of the tax cuts should be allowed to expired. But there’s a lot of room between letting all of the tax cuts expire and permanently restoring all of the tax cuts. I think there are really two options hanging out there right now, and some version of one of these is almost certain to pass. The first version is that all off the tax cuts for those making less than $250K are extended, but allowed to expire for those making more than $250K. The second option being discussed is to temporarily extend all of the tax cuts for one or two more years. I think it’s this second option that is the more likely agreement. It’s hard to imagine Republicans filibustering either option, but you never know. The Republicans have a weak hand here because delaying tactics mean that the tax cuts automatically expire. So the burden here is on the Republicans to push through legislation rather than try and stand in the way. This also puts the Democrats in a good position to extract from the Republicans an agreement to accept relief for state and local workers.
But once the economy is back on its feet, do you agree that we will need higher taxes? And I don’t just mean higher taxes on the rich…that will make up a lot of ground but it still won’t be enough. We’re still going to need additional sources of revenue.
2slugs and KHarris, I am concerned that you are suffering from the Dunning-Kruger effect. “The Dunning-Kruger effect is a cognitive bias in which an unskilled person makes poor decisions and reaches erroneous conclusions, but their incompetence denies them the metacognitive ability to realize their mistakes. ”
Here’s the Wiki link: http://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect
2slugs, good analysis of the Bush tax cuts roll back issues. I would add that there is another alternative for the Repubs, and that is to do nothing. In that strategy they point attention solely upon Dem policies.
The core of the issue is the Obama promise (which he has already reneged upon) to not raise taxes on those making $250K, $200K,or what ever he settled upon as the magic number.
CoRev: …do nothing. In that strategy they point attention solely upon Dem policies.
The Republicans may well try that strategy, but notice that this is just another way of saying that the Republicans would like to lie about Bush’s tax cut legislation actually said. Remember, it was Bush who inserted the 10 year limit. Bush could have tried to make the tax cuts permanent, but the problem there was that it wouldn’t have gotten past the budget rules because the CBO numbers blew up. Or Bush could have tried a different kind of tax cut, which Democrats might have supported. But Bush being Bush, he decided to gamble everything on a long shot and if things didn’t work out at the end of 10 years…well, it would be someone else’s problem. Bush was good at that. So yes, the GOP might very well try and pin the tax hike on the Democrats, but you and I both know that the tax hike is something that not only Bush agreed to back in 2001. So this is another example of the GOP leadership trying to rewrite history, which was Menzie’s point.
I hope Obama does break that pledge because it was a stupid thing to say during the campaign. Anyone with even rudimentary math skills (which may exclude many teabaggers) can plainly see that taxes will have to be increased on everyone, not just those making more than $250K. However, that tax increase does not have to be in the form of an income tax hike. Since Medicare is driving the outyear structural deficits it might make a lot of sense to bump up the Medicare tax. Or we might want to impose a small VAT.
2slugs, by all appearances you actually believe what you write. The evidence is the consistency in reciting the same political points with the same arrogance. In the end, it just confirms my suspicion of D-K effect.
I am embarrassed for you. I hope that hole in your foot will heal. Unfortunately, I expect I will not be around to read all about it.
2slugbaits, you, like Menzie, like to get caught up in semantics. I’m not going to argue the meaning of words with you.
Here’s the deal: Obama promised to let the Bush tax cuts on the wealthy expire, but retain those for the proles.
But for that to happen, Congress needs to get moving NOW. Legislation like this takes time.
I don’t see movement in Congress to preserve ANY of the tax cuts. There has been some talk of wha strategery the Republicans might pull in order to preserve all the tax cuts, but I have seen no news on actual movement on any bill.
Are the Republicans promising to hike taxes immediately on gaining control to replicate the Clinton years?
If we look at the Reagan-Bush years, the first thing was the tax cut, and it was down hill from there, with small tax hikes peppered through the rest of his term, until Bush hiked taxes in 1990, then started a war.
If we look at Bush in 2001, it was tax cut after tax cut and down hill from there until Obama who then tried to gain support from conservatives with yet more tax hikes, going further down hill.
Tax cuts don’t deliver a better economy, so are Republicans going become tax hikers?
Mulp said: “Are the Republicans promising to hike taxes immediately on gaining control to replicate the Clinton years?” Exactly the plan. Then we intend to have 6-7 years of business/GDP growth just like St. Bill. Of course, Obama’s plan was to replicate the FDR path to economic recovery. Regrettable, Obama is on the same path as FDR.
How much longer before you realize that some of that Reagan/Bush/Clinton/Bush “…down hill from there,…” would look really, really good right now. But, you keep believing your own story, it sounds so good until we take a look at the actual numbers.
perhaps someone could help, if people hate GWB, why would they like Obama, when the polices are the exact same, just taken to the next level?