Paul Krugman: Let’s Not Make a Deal

[Derechos]

Democrats have tried to push a compromise: let tax cuts for the wealthy expire, but extend tax cuts for the middle class. Republicans, however, are having none of it. They have been filibustering Democratic attempts to separate tax cuts that mainly benefit a tiny group of wealthy Americans from those that mainly help the middle class. It’s all or nothing, they say: all the Bush tax cuts must be extended. What should Democrats do?

The answer is that they should just say no. If G.O.P. intransigence means that taxes rise at the end of this month, so be it.

Think about the logic of the situation. Right now, the Republicans see themselves as successful blackmailers, holding a clear upper hand. President Obama, they believe, wouldn’t dare preside over a broad tax increase while the economy is depressed. And they therefore believe that he will give in to their demands.

But while raising taxes when unemployment is high is a bad thing, there are worse things. And a cold, hard look at the consequences of giving in to the G.O.P. now suggests that saying no, and letting the Bush tax cuts expire on schedule, is the lesser of two evils.

Bear in mind that Republicans want to make those tax cuts permanent. They might agree to a two- or three-year extension — but only because they believe that this would set up the conditions for a permanent extension later. And they may well be right: if tax-cut blackmail works now, why shouldn’t it work again later?

America, however, cannot afford to make those cuts permanent. We’re talking about almost $4 trillion in lost revenue just over the next decade; over the next 75 years, the revenue loss would be more than three times the entire projected Social Security shortfall. So giving in to Republican demands would mean risking a major fiscal crisis — a crisis that could be resolved only by making savage cuts in federal spending.

And we’re not talking about government programs nobody cares about: the only way to cut spending enough to pay for the Bush tax cuts in the long run would be to dismantle large parts of Social Security and Medicare.

http://www.nytimes.com/2010/12/06/opinion/06krugman.html?_r=1&hp

[MadHound]

1. Well, I can see that Krugman is going to be going back under the bus again,

Put there by those whose admiration for Obama outstrips their intelligence and common sense.

[Betty Karlson]

2. K & R. n/t

[Steely_Dan]

3. Paul Is Right On n/t

[Jim__]

4. I agree with Krugman.

But, so far, I haven't seen any indication that Obama has the stomach to fight.

[SOS]

5. Follow the law as it was written

The tax cuts expire at the end of the month.
Let this Bush/Cheney BS expire!
Then come back with something completely new, like a payroll tax holiday or a huge "Making Work Pay" deduction for those under $200K.

We don't need this Bush aggravation.
He's been gone and forgotten for two years now.
Why must we wrestle with his ghost?