Monday, June 16, 2008



The conclusions in this morning's Paul Krugman column, Fiscal Poison Pill, in the NY Times should come as no surprise to anyone, least of all Paul. And it would be hard to imagine that any semi-regular reader of DWT might not have already figured the point into our dismal national mix. The dismal mix, of course, is Grover Norquist's dream-come-true-- and Bush's good-bye present to the United States of America and the somnolent, spoiled citizenry which allowed him to steal two general elections. Bush failed at most of what he tried-- other than the utter destruction of civil society in Iraq, though not everyone would agree with me that that was his goal. But one thing he certainly did succeed at was drowning America in so much red ink as to poison the well for future administrations and for future generations.
Exhibit A of the poison pill in action is the sad case of John McCain, part of whose lingering image as a maverick rests on his early opposition to the Bush tax cuts, which he declared excessive and too tilted toward the rich.

Since then the budget surpluses of the Clinton years have given way to persistent deficits, and income inequality has risen to new heights, vindicating his opposition.

But instead of pointing this out, Mr. McCain now promises to make those tax cuts permanent-- and proposes further cuts that are, if anything, tilted even more toward the wealthy. And how is the loss of revenue to be made up? Mr. McCain hasn’t offered a realistic answer.

You can explain though not excuse Mr. McCain’s behavior by his need to shore up relations with the Republican base, which suspects him of being a closet moderate. But he’s not the only one seemingly trapped by the Bush fiscal legacy.

Barack Obama’s tax plan is more responsible than Mr. McCain’s: relative to current policy, the Tax Policy Center estimates, the Obama plan would raise revenue by $700 billion over the next decade, compared with a $600 billion loss for Mr. McCain.

The Obama plan is also far more progressive, sharply reducing after-tax incomes for the richest 1 percent of Americans while raising incomes for the bottom 80 percent.

But while $700 billion may sound like a lot of money, it’s probably not enough to pay for universal health care, which was supposed to be the overriding progressive priority in this election.

Why doesn’t Mr. Obama propose raising more money? Blame the Bush poison pill.
First of all, Mr. Obama-- like, to be fair, his main rivals for the Democratic nomination-- isn’t willing to challenge the Bush tax cuts as a whole. He only proposes rolling back tax cuts for those making more than $250,000 a year.

Second, Mr. Obama proposes giving back a substantial part of the revenue raised by this partial tax-cut rollback in the form of new tax cuts.

These tax cuts would mainly benefit lower- and-middle-income families, although this can’t be said of Mr. Obama’s plan to eliminate income taxes on seniors with incomes under $50,000: since most seniors already pay no income taxes, this would do nothing for those most in need. And one wonders why we should create the precedent of exempting particular demographic groups from taxes.

But the big question is, are these tax cuts, however appealing, a top priority? The most expensive proposal, under the title Making Work Pay, would give most workers $500 in tax credits, at a 10-year cost of more than $700 billion. Isn’t it more important that workers be assured of health care?

The problem, I believe, is that even Democrats have bought into the underlying premise of the Bush years-- that the best thing you can do for American families, or at least the only thing that can win their votes, is to give them a tax break.


Krugman is 100% correct about the damage, in the form of the poison pill, Bush has bequeathed the government. And then there's what he's done to the economy and to the individuals who Republican policies have damaged so grievously. It may not be exactly the same in other parts of the country, but in Los Feliz, the Los Angeles neighborhood where I live, houses, if they sell at all, sell for 1991 prices. Bush's GOP agenda has managed to drain nearly a generation worth of equity out of homes. And there are still 20% who think he's doing a good job!

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At 7:54 AM, Anonymous Anonymous said...

I am starting to hope my disappointments are manageable during the Barak Obama presidency. Yes, healthcare "should" be top tier goal but it seems it is fading. Getting out of Iraq is another top tier goal, I wonder how that will play out .... as Ken said with that albatross around our necks it will really hamper any progress in so many areas. It will be interesting to see the "will" of the people acted upon (or not) with a Democratic president and Congress .... I hope the "more and better" scenario has a great impact.

At 5:38 PM, Anonymous Anonymous said...

If we got rid of the insurance company profit and overhead rip=off that should make up the difference. universal health care the only answer.


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