Wednesday, July 29, 2009

Cutting taxes doesn't stimulate the economy!

Backdating the Recession

Here's an odd thing. Snippet one says cutting taxes doesn't stimulate the economy, that's wrong right from the start. However, note that they are emphasizing that it doesn't stimulate and is therefore, for that reason, wrong. Then, in the very next paragraph, snippet two, they laud aspects of the democratic proposal, none of which are stimulative. You can't have it both ways. Either stimulus is good or it is bad, you can't say that the White House approach is wrong because it isn't stimulative and then not apply that standard to the Dems whereby you use "social justice" as the measure.

Snippet 1: The president's main proposal is instead to accelerate and lock in place the cuts in income tax rates that Congress passed but deferred last spring. Those would mainly go to upper-income households more likely to save than to spend the bulk of the money, and most of those cuts would not occur until after next year. That isn't stimulus; it is a reward to a favored constituency, masquerading as stimulus. The same is true of his proposal to repeal the minimum corporate income tax.

Snippet 2: The resisting Democrats would mainly use the legislation instead to sweeten unemployment benefits, help the unemployed maintain health insurance and help the states ride out the recession with fewer spending cuts. That's the right thing to do; they should stick to their guns.