Jan 14th, 2009 at 3:11 pm
Stimulus vs. Permanent
Not only is this barrel full of tax cuts proposed by the Republican Study Committee pretty bad stimulus, but to even call a package of permanent tax cuts a “alternative stimulus” is a serious abuse of the term. The idea of a stimulus measure is that you increase the budget deficit over the short-term to try to get the economy back to something like a full employment of available resources. But a permanent increase in the deficit extends, by definition, into non-recessionary periods in which such deficits operate as a drag on growth.
39 Responses to “Stimulus vs. Permanent”
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January 14th, 2009 at 3:13 pm
I think Washington’s favorite meme is Tax Cuts Solve Everything.
January 14th, 2009 at 3:18 pm
Okay, this “permanent” thing gets stuck in my craw, but shouldn’t something be proven to be a smashing and inevitable success for the nation as a whole before anyone talks about making it “permanent”? All I hear when I hear about “permanent tax cuts” is that the plutocrats don’t want to have to lobby anymore.
January 14th, 2009 at 3:20 pm
Zaid beat me to it. I really do envy the lifestyle of conservative think-tankers—they must have time for a three-martini lunch every single day.
January 14th, 2009 at 3:24 pm
Zaid beat me to it. I really do envy the lifestyle of conservative think-tankers—they must have time for a three-martini lunch every single day.
Quite the opposite: it takes a lot of imagination and hard work to come up with reasons to explain why tax cuts are the solution to everything, including:
1. Recession
2. Natural disasters
3. Aging population
4. Terrorist attacks and wars
5. Bubbles
etc…
January 14th, 2009 at 3:43 pm
Al, spend 2 min and go on wikipedia and check what presidents increase spending. After noticing its all republicans, check what administrations had good economies. After noticing its democrats, notice your tax cut advocacy only benefits top earners and absolutely nothing else.
January 14th, 2009 at 3:45 pm
Democrats favor terrorist attacks? They favor more wars than Republicans? Really?
January 14th, 2009 at 3:47 pm
yes, well I think most of these ideas occur directly after those 3-martini lunches. really, you have to be either very drunk or just dumb as rocks, or some combo thereof to not understand a basic point like that one you’re making. it doesn’t speak well of anyone who thinks any tax cuts should be part of a ’stimulus’ package – they are just totally incongruent things. I really hope Obama drops this habit of saying “tax cuts!” every time somebody sneezes. he’s starting to sound really corny on the issue.
and don’t interact with the Al creature here, or suggest that it read something. whatever the suggestion – its not getting read!
January 14th, 2009 at 3:49 pm
The thing is, government can do useful things about those problems, whereas tax cuts don’t do anything useful about them. So, yes.
January 14th, 2009 at 3:50 pm
Matt says:
“The idea of a stimulus measure is that you increase the budget deficit over the short-term…”
Which, of course, rules out so many of the transit projects that Matt has been advocating, which will take decades to finish.
January 14th, 2009 at 3:53 pm
A Poem
“Some things never change”
Notwithstanding the thorough rebuke of November ‘08.
Who are we to call their ideas inchoate.
When we implore spending, they want to get out their axes.
And rub in our face the ideology of low-taxes.
Its tough to deny a tax cuts’ appeal to the masses.
But when we read the budget we want to scream: get out your glasses!
You must admire the tenacity of the Republicans.
It is they for whom the bell tolls repeatedly all of those… Here-We-Go-Agains!!!
January 14th, 2009 at 3:58 pm
Steve Sailor: Wrong. If the projects can be started in the short term, jobs are created in the short term. The project doesn’t have to finish in the short term.
January 14th, 2009 at 4:02 pm
How fast is the Purple Line through Chevy Chase getting started?
As you may recall, liberals / progressives have spent the last 40 years making it excruciatingly slow to get construction projects off the ground on either coast. I realize they never intended the environmental / historical preservation / Native American burial grounds / etc. laws were never intended to apply to liberals / progressives themselves, but there is this little problem that they forgot to mention that exception when they wrote the laws.
January 14th, 2009 at 4:08 pm
I realize that this brief period when liberals are in power and all spending constraints are off seems like too good an opportunity to resist for Matt’s fantasies of being the Good Green Robert Moses of the 21st Century, but liberals have made their bed over the last 40 years with environmental regulations and are going to have to live in it.
So, let me recommend once again a better buzzphrase: “human infrastructure.” States are going bankrupt, so Obama should announce a “human infrastructure” crisis and send money to keep firemen and the like employed.
January 14th, 2009 at 4:08 pm
The idea of a stimulus measure is that you increase the budget deficit over the short-term to try to get the economy back to something like a full employment of available resources.
No, the idea of a stimulus measure is that you do anything you can to try to get the economy back to something like a full employment of available resources. If “permanent” tax cuts will change private behavior in a way that provides short-term economic activity (i.e. invest or spend more), then it falls under the category of a stimulus.
It’s unclear to me that such a tax cut would work, but it’s also unclear to me that ridiculous amounts of government spending will do any better. Either way, they can both count as “stimulus” if and only if they have the desired effect.
January 14th, 2009 at 4:20 pm
I actually really like the “human infrastructure” phrase.
I wonder if it’d be possible to get lots of educational benefits and whatnot in with it.
January 14th, 2009 at 5:29 pm
a problem is that the GOP can get the media (i.e., the journalists that Barnacle et al love so much) to take the whole silly package seriously as “an alternative”
January 14th, 2009 at 6:04 pm
Those who propose making the tax cuts permanent while keeping government spending high or increasing it fail to take into account that we got into our current mess in spite of tax cuts and increased government spending over the last 8 years.
January 14th, 2009 at 6:21 pm
Steve Sailer – The thing that’s delayed the Purple Line the most is a Republican governor, Bob Ehrlich, kowtowing to those folks in Chevy Chase. The last 20 years of delay on the Purple Line have had little to do with environmental regulations, they have been caused by the excessive political influence of rich people. Yes, rich Democratic corporate lobbyist types have been involved as well as rich Republicans, but if you would bother to read M. Yglesias’ blog, you would learn that he isn’t a fan of those people’s influence in the Democratic party.
Please do research rather than just blaming anything you don’t like on your favorite liberal bugaboos.
January 14th, 2009 at 7:36 pm
tt says:
“The last 20 years of delay on the Purple Line …”
That’s hilarious …
I had no idea that we were talking about “the last 20 years of delay” — what a perfect example I stumbled upon.
So, here in the Maryland suburbs of Washington DC, one of the most liberal places in the country, a transit project has been held up for 20 years.
Yeah, we should definitely go ahead with Matt’s favorite transit projects in order to stimulate us out of the Recession of 2028!
January 14th, 2009 at 8:00 pm
Steve Sailer is perfectly unashamed of the fact that he’s spouting opinions about things that he doesn’t know the simplest facts about, facts that he could easily have determined with two or three clicks of a mouse.
January 14th, 2009 at 8:24 pm
Sailor: Yeah, we should definitely go ahead with Matt’s favorite transit projects in order to stimulate us out of the Recession of 2028!
It’s this kind of willful stupidity that’s gonna bring the Republican party back in the good graces of the American people.
January 14th, 2009 at 11:56 pm
The idea of a stimulus measure is that you increase the budget deficit over the short-term to try to get the economy back to something like a full employment of available resources.
In one of your previous posts, you pointed out how expanding foodstamps and unemployment benefits were the best bang for the buck. Will these be temporary too? Or, in 2-3 years, (or sooner) if the economy is better and deficits matter again, will people demagogue attempts to scale back foodstamps by saying it will starve children? (I presume if people are working, payouts for unemployment benefits will go down naturally)
January 15th, 2009 at 9:28 am
There’s be no “trillion dollar spending spree” — “not one penny” of new spending. “Borrowing from one part of the economy and redistributing it to others will not grow the economy.”
When you borrow money and give it to people it not a tax cut, it’s spending, your simply using the tax code to redistribute it.
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