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Paul Krugman's latest column indirectly hints at the puzzling reality of President Obama's stimulus plan: tax cuts are useless.  Krugman tries to defend Obama's plan against the criticism the Republican Party of failures and losers has tried to paint it with.  And he does a good job of defending every aspect of the bill--except for the foolish tax cuts that Obama has decided to include.

In fact, Krugman chooses to indirectly discuss the huge tax-cut portion of the bill:

The point is that nobody really believes that a dollar of tax cuts is always better than a dollar of public spending. Meanwhile, it’s clear that when it comes to economic stimulus, public spending provides much more bang for the buck than tax cuts — and therefore costs less per job created (see the previous fraudulent argument) — because a large fraction of any tax cut will simply be saved.

This suggests that public spending rather than tax cuts should be the core of any stimulus plan. But rather than accept that implication, conservatives take refuge in a nonsensical argument against public spending in general.

This is a marvelous argument for ignoring tax cuts the Republican failures have been suggesting. But what Krugs forgets to mention is that President Obama has decided to waste a full one-third of his proposed stimulus plan on tax cuts anyway.

Krugman tries to run some cover by saying the "core" of any plan shouldn't be about tax cuts.  But the fact of the matter is 1/3 of one of the biggest spending bills in the history of this nation IS about tax cuts and IS something everyone should pay attention to.  Just because tax cuts are not the "core" of the spending in this bill does not make tthem any more useful.

President Obama's stimulus plan includes tax cuts for no reason other than to kiss some Republican ass.  But the plan to please the party of losers and failures has already backfired, and now it is being criticized by the Republican failures as not having enough tax cuts.

The GOP is pushing especially hard for a new round of traditional tax cuts, while suggesting that the Democrats are rushing into new government spending programs that will send the deficit soaring. Democrats contend that only large-scale federal action can stabilize the economy and begin the process of recovery.

Those competing positions were reflected both in Obama's radio speech and in GOP comments Saturday.

"On the House side they seem to be moving toward a vote on Wednesday, and unless there are some real changes in the bill, I can't imagine there will be much, if any, Republican support," said Kevin Smith, a spokesman for House Minority Leader John A. Boehner (R-Ohio).

There's a big surprise from bonner boy!  Obama tries to bring the failures along and they cry like babies the whole car ride.

In effect, the White House and congressional Republicans are engaged in the early stages of a political negotiation in which Obama seeks to pass his stimulus program with at least a plausible claim of bipartisan support. Republicans want to exert as much influence over the final package as they can without appearing to obstruct action on a problem that has stirred deep concern among millions of voters.

The Republican Party is the party that disgracefully and pathetically cut taxes during war-time, and is largely responsible for the failing of our economy.  Instead of recognizing that their third-grader response to one of the biggest economic emergencies in history is useless and should be ignored, Obama not only gives them taxes cuts, but he throws the microphone in their face so they can cry for more.  

I know, maybe President Obama should just gut the measly 18% on infrastructure and make 51% of the bill tax cuts!  That will get those 30 to 40 useless Republican votes he wants!  This is predictable.  The failure party knows that if Obama puts too much spending and not enough tax cuts the American people will actually be HAPPY with the results of this bill.  Thus, the Republican failures are going to fight it tooth and nail by pushing for tax cuts until Democrats in the House squeal.  They don't want people to get a whiff of what affordable healthcare is like, they don't want kids going to schools that will be modernized under this plan, and they don't want women having a government that supports their reproductive privacy.


Americans are not screaming for tax cuts.  We are screaming for jobs that pay a decent wage!
 And President Obama doesn't need bi-partisan consensus--he already has REAL consensus built into the government via a huge Democratic majority in the House and a solid majority in the Senate. The reality-based consensus is clear: tax cutting Republican losers are out, pro-growth Democrats are in!  

Pick off a few Republicans and this is over, why waste your time on tax cuts to get 30 more of these idiots to sign on?  Who cares!  The American people surely are not clamoring "Oh, Please, Mr. President, get those Republican losers to sign on!  We want bi-partisanship!  Screw getting things done, as long as you can pick up 30 Republican votes!  Who cares if you exchange meaningful spending for useless taxes!  At least you will get the Republicans!"

One wonders what the hell Obama was thinking in the first place when he decided to play into Republican hands by surrendering a third of his stimulus plan to useless tax cuts.  On the one hand, it could be political strategy: put in some tax cuts so Republicans look like little bitches when they complain about a bill that Obama put tax cuts in just to please them in the first place.  On the other, Obama may have naively thought the village idiots would collectively be happy with his tax cuts and let the whole package slide through.

Either way, the end result is more useless tax cuts and less spending on infrastructure and solid improvements.  And either way the Republicans will cry like wimps and cowards over any bill that may actually help the American people.

Originally posted to TonyZ on Mon Jan 26, 2009 at 09:38 AM PST.

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Comment Preferences

  •  um ... Duh! I'm Hoping His Hope Schtick is JUST (7+ / 0-)
    Recommended by:
    Chi, eugene, DaleA, LordMike, Silverbird, tung sol, cyeko

    a Schtick when it comes to workign with these lying, stealing cheating motherfuckers.

    rmm.

    Yond Cassius has a lean and hungry look; He thinks too much: such men are dangerous

    by seabos84 on Mon Jan 26, 2009 at 09:40:47 AM PST

  •  Part of the plan (1+ / 0-)
    Recommended by:
    Catte Nappe

    has to be to rebuild confidence - you can't rebuild / restore confidence if you have a little less than half the members of Congress whining about the plan (it works - we did it to Bush).

    Obama knows this so politically, he has to get most on board.

    The care of human life and happiness, and not their destruction, is the first and only legitimate object of good government. - Thomas Jefferson

    by ctexrep on Mon Jan 26, 2009 at 09:43:49 AM PST

    •  at what cost... (5+ / 0-)

      to making real improvements? the repubs are just going to dilute the work and that muddies the water about what really works and whats appeasement.
      tung sol

      tung sol was right.--Governor David A Paterson

      by tung sol on Mon Jan 26, 2009 at 09:46:22 AM PST

      [ Parent ]

      •  That's a rhetorical question (4+ / 0-)
        Recommended by:
        DaleA, highacidity, MelloY, Jon Says

        becasue the Dem's believe they are correct and the Repugs believe they are correct.

        It's the Presidensts job to take whats best and make the best of it.  Obama has to listen - he campaigned on raising taxes on the wealthy - he is postponing that becasue he has said, it's not a good time to raise taxes.  This will be used against him by the Pepugs becasue they will spin it as Obama knows that tax cuts are good - if not he would be raising them.

        I would say, support the President at this point - he knows what he is doing.

        The care of human life and happiness, and not their destruction, is the first and only legitimate object of good government. - Thomas Jefferson

        by ctexrep on Mon Jan 26, 2009 at 09:53:08 AM PST

        [ Parent ]

        •  No, the Dems believe there is hope (0+ / 0-)

          for the Republicans, and the Republicans know the country is stuck with the few of them who still have office space in D.C.

          "Homeless veteran" should be an oxymoron.
          "Please know that I accept you and yours with no need for explanation of [any] kind." -Translator

          by iampunha on Mon Jan 26, 2009 at 10:47:18 AM PST

          [ Parent ]

        •  considering the... (0+ / 0-)

          fact that he has reneged on several important promises doesn't bode well. and his misguided belief that the repubs are going to fall in line are just that misguided. i'm not sure he knows what he's doing.
          tung sol

          tung sol was right.--Governor David A Paterson

          by tung sol on Mon Jan 26, 2009 at 11:35:55 AM PST

          [ Parent ]

    •  Can't. (7+ / 0-)

      Republicans will not get on board unless they write the stimulus themselves.

      Obama is mistaken if he believes they are interested in helping the country - all they're interested in is helping their rich cronies AND in undermining Obama's reelection chances.

      There is literally nothing to be gained, and much to lose, by trying to appease Republicans.

      I'm not part of a redneck agenda - Green Day
      Neither is California High Speed Rail

      by eugene on Mon Jan 26, 2009 at 10:02:27 AM PST

      [ Parent ]

    •  No, he has to implement policies that work (0+ / 0-)

      If he does that, the country will be behind him. If he implements bad policies for the sake of scrounging a few Republican votes, he will get no gratitude from country or Republicans.

  •  Obama doesn't need to get them on board, he (20+ / 0-)

    just needs to show he's made the effort. The more he appears to be reaching out, the worse it looks for the Republicans if they slap his hand. It makes them look obstructionist, obstinant, and playing politics as usual as the country goes down the tubes. Obama knows exactly what he's doing.

    Hannity's America is just South of Sanity.

    by DWKING on Mon Jan 26, 2009 at 09:46:47 AM PST

  •  Obama Mama didn't raise no fool (10+ / 0-)

    He's got the political capital and he intends to spend it.  The people voted for his economic plan.  But what's classier, shoving your plan through bombastically while saying "I'm the decider!" and calling people names who get in your way?  

    Or putting out a nice harmless compromise, letting your opponents show the country what children they are, and then going ahead and doing what needs to be done with or without them?

    Obama's got a tough job and I'm sure there will be missteps along the way.  But ultimately he will be judged on the end result, not the day to day bargaining.

    •  The compromise is not harmless (3+ / 0-)
      Recommended by:
      DaleA, jedennis, Tam in CA

      When you cut infrastructure spending to offer tax cuts, you are weakening the economy and hurting real people.

      I'm not part of a redneck agenda - Green Day
      Neither is California High Speed Rail

      by eugene on Mon Jan 26, 2009 at 09:51:31 AM PST

      [ Parent ]

      •  We can't get caught up in "ideology" either... (0+ / 0-)

        Tax cuts hit faster than infrastructure...so it is prudent to have a mixture.

        Obama benefits by saying look, here are the middle-class tax cuts I campaigned on AND serving a nice warm bucket of STFU to Republicans.

        it's important to say "what would you like" and then say well... "the American people said they back me."

        •  No they don't (0+ / 0-)

          If you want to look at pure reality then we look at 2008 where the tax checks did nothing - nothing whatsoever - to stimulate the economy.

          The argument that "tax cuts hit faster than infrastructure" is based on a different kind of economy. Right now Americans would not consume if you paid them to - which of course is what tax cuts are aimed at doing.

          The goal of Americans now is to pay down debt and build up savings. The tax cuts will "hit" bank balance sheets, not the cash register of the locally owned small business, or even of the chain retailer facing doom.

          I'm not part of a redneck agenda - Green Day
          Neither is California High Speed Rail

          by eugene on Mon Jan 26, 2009 at 11:06:31 AM PST

          [ Parent ]

          •  But if you pay people to pay down debts (1+ / 0-)
            Recommended by:
            Ilikepie

            won't fewer of them default on their loans? If fewer people are at risk of defaulting, won't that increase lender confidence. If lenders have confidence, aren't they more likely to issue loans?

            Why, exactly, shouldn't Obama honor his campaign promise to cut takes for those earning less than $200,000/year?

            Muphry's Law: if you write anything criticizing editing or proofreading, there will be a fault of some kind in what you have written.

            by opendna on Mon Jan 26, 2009 at 11:45:02 AM PST

            [ Parent ]

          •  A one-time stimulous check... (0+ / 0-)

            is going to have a different effect from a tax cut on middle class.

            However, the point I'm trying to make is economic ideology shouldn't prevent worthy ideas ... Like Buffett has said you have to have a multi-faceted approach.

            Obama's tax-cuts are good -- they fulfill a campaign promise and ideally will have a stimulative effect.

            obviously it would be great to have 2 MM jobs ready awaiting funding -- however, that is not the case.

      •  That's not all (1+ / 0-)
        Recommended by:
        eugene

        Yesterday I read that Obama told Senator Durbin to back off attaching the mortgage cramdown legislation to the stimulus bill for fear it would cost votes. Yet another sacrifice for nothing. As someone who believes that cramdown legislation is the only hope for saving our home, I must admit Obama is breaking my heart.

        •  Yup (1+ / 0-)
          Recommended by:
          Tam in CA

          That is a huge issue. Kossacks probably don't want to hear about that one, but to abandon help for those facing foreclosure so as to try and win Republican votes...there's no justification for that. At all.

          I'm not part of a redneck agenda - Green Day
          Neither is California High Speed Rail

          by eugene on Mon Jan 26, 2009 at 11:07:19 AM PST

          [ Parent ]

          •  Well, there is something to be said for (0+ / 0-)

            doing bankruptcy reform as a separate bill from a $1.3 trillion spending package. Cramdown sounds simple, but has some rather complicated results which deserve proper consideration. As of this week, Citi Bank supports "cramdown" even though analysts are putting it near the top of "loosers" from the bill, so maybe that one just needs a wee bit more time (or maybe they've figured out how to turn "cramdown" into a "taking" via "eminent domain").

            I'm disappointed that universal health care isn't part of the stimulus package, but I don't see that as a sign that it's been abandoned as a policy goal.

            Muphry's Law: if you write anything criticizing editing or proofreading, there will be a fault of some kind in what you have written.

            by opendna on Mon Jan 26, 2009 at 11:55:55 AM PST

            [ Parent ]

            •  I get your point (1+ / 0-)
              Recommended by:
              opendna

              regarding VA and FHA loan guarantees. But the longer such legislation takes, the more foreclosures will occur (mine included), and the longer it takes to stop the foreclosure avalanche, the longer it will take for the ecomony to stabilize.

              There has been a moratorium on some foreclosures (Fanny and Freddie at least) that will lift after January 31st. Watch for the numbers to skyrocket after that point.

              My disappointment comes from Obama's seeming appeasement of the Republicans. McCain basically said yesterday that unless the Bush tax cuts are made permanent - no deal. How does that leave any room for compromise?

    •  He sees the forest and the trees simultaneously. (0+ / 0-)

      It's a gift.

  •  If he can't get them onboard (2+ / 0-)
    Recommended by:
    DaleA, highacidity

    Then they'll have to remain powerless and stand in the background while the rest of us move forward. I think Obama is giving this a good faith effort-but I also think he knows he'll have to move without them, there is too much at stake ...keep telling them Obama, "I WON."

    Change will not come if we wait for some other person or some other time. We are the ones we've been waiting for. We are the change that we seek.- BHO

    by valadon on Mon Jan 26, 2009 at 09:50:26 AM PST

  •  He won (2+ / 0-)
    Recommended by:
    highacidity, LordMike

    and he knows it.

    In case you missed it, Obama is quite adept at dealing with his political opponents, in the interest of furthering his agenda. Watch this one play out.

    "This victory alone is not the change we seek -- it is only the chance for us to make that change." -- Nov. 4, 2008

    by BobzCat on Mon Jan 26, 2009 at 09:50:54 AM PST

  •  Mitch McConnell is my senator. (2+ / 0-)
    Recommended by:
    DaleA, jedennis

    How does a willing man like Obama cooperate with people as uncoperative as most present-day Republicans?

    The political center in the country right now wants jobs, single payer health care, an end to our wars, and improved education.  DC is the home of a fictional center that citizens repudiated.

    ...do the elites...actually believe that society can be destroyed by anyone except those who lead them? - John Ralston Saul -

    by Silverbird on Mon Jan 26, 2009 at 09:52:29 AM PST

    •  McConnel has said he won't filibuster... (2+ / 0-)
      Recommended by:
      DaleA, dansmith17

      ...and it seems that Obama has been having a lot of backroom talks with him... Surprisingly, he may not be the problem.  Boehner, on the other hand, wants to be the Rush Limbaugh hero, so he'll destroy the country to have his way, if necessary...

      Comments that say "GM workers should get retraining" without SPECIFIC DETAILS about those "new jobs" that never come are trollworthy

      by LordMike on Mon Jan 26, 2009 at 10:10:32 AM PST

      [ Parent ]

  •  Centrist ideology is great if it works but (2+ / 0-)
    Recommended by:
    eugene, DaleA

    the masses in the Capital Hill don't understand the meaning of it. All they know is how can I make a name for myself at whatever cost to Americans. I truly feel for Obama because these people will destroy him in the long run unless, block by block we change and clean house these no good representatives who are always looking out to score points. I have just about had it. Obama has to use his heavy stick and start spanking them or else he will be spanked without knowing it and by the time he knows it, it will be too late for a comeback!

  •  Have you heard of 'giving them a long rope' ? (2+ / 0-)
    Recommended by:
    highacidity, LordMike

    From Alabama to Obama - You've come a long way baby.

    by amk for obama on Mon Jan 26, 2009 at 09:57:26 AM PST

  •  Earned Income Tax Credit (0+ / 0-)

    So are you saying that if the Earned Income Tax Credit (or any credit against payroll taxes) were expanded, those people eligible for the credit wouldn't spend the money?  I have a hard time believing that.  People eligible for the credit are very apt to spend the money.

    We agree that tax cuts for the wealthy don't give much, if any, bang for the buck as those people are not likely to spend the money.  But tax cuts for the working poor, I believe, do work, although they don't bring as much "bang for the buck" as other forms of public investment do.  Still, it takes time to spend money well, which is why some tax cuts have to be included in the package.

  •  It's a game of chicken now... (2+ / 0-)
    Recommended by:
    DaleA, kafkananda

    Who will blink first... Will the repbulicans stand against a popular president?  Will their leadership cave?  Or will the rank and file underneath them cave and undermine their authority?

    Biden, Schumer, and Reid seem unconcerned on the Senate side.   They think they've got the extra votes and mc'cain's rant is nothing but posturing.  On the house side, we only need a handful of republicans in blue states to get us 2/3rds of a majority...

    Well see what happens, but it looks like a done deal at the moment...

    Comments that say "GM workers should get retraining" without SPECIFIC DETAILS about those "new jobs" that never come are trollworthy

    by LordMike on Mon Jan 26, 2009 at 10:09:01 AM PST

  •  I hope Obama is playing rope-a-dope (0+ / 0-)

    I hope he is letting the public see that it is impossible to work with Repugs and uses that a reason to move his agenda.

  •  it's all to boost confidence (1+ / 0-)
    Recommended by:
    Jon Says

    None of these programs are meant to achieve anything more than restore consumer confidence. That's all the government can do. Because, realistically, how can spending a trillion jump start the world economy? There are so many things that so many governments are doing right now, but they are aimed more at making the citizenry happy than at actually restarting the world economy, which is not in the power of government. So if tax cuts make all the conservative leaning Americans happy, then they should be in there. If giving each person a kitten would make them spend more, then they should be given kittens.

    And if anybody has an idea that is something other than artificially inflating spending again to set up another bubble, they should probably speak up at some point, because that is exactly what these econimic geniuses are trying to do, again.

    Law is a light which in different countries attracts to it different species of blind insects. Nietzsche

    by Marcion on Mon Jan 26, 2009 at 10:24:21 AM PST

  •  I'd actually have to say that the plan is working (1+ / 0-)
    Recommended by:
    dansmith17

    perfectly.

    The public perception at the moment is that President Obama is doing everything in his power to get a good bill passed, with the input of every member of congress.

    If the Republican party chooses not to help pass this legislation, then they're going to be in deep, deep trouble down the line.  And if the the President and Democratic party have no support from the Republicans, then they have all the right in the world to alter the legislation in a way that they feel will better stimulate the economy.

    The process is working perfectly.  The plan is good.

  •  There's a larger point than mere bipartisanship (2+ / 0-)
    Recommended by:
    kafkananda, dansmith17

    During the campaign, Obama based a good portion of his economic rhetoric around the repeal of the Bush tax cuts and the creation of a real middle class tax cut.

    If he were to begin championing a stimulus plan which included no tax cuts, he'd be handing the Republicans a weapon.  Sure, he won and elections have consequences.  But elections also have sequels, and nothing will make forwarding his agenda more difficult than a never-ending chorus of, "Obama's just like every other politician, making promises he doesn't intend to keep!"

    I have no problem with him including a nice solid round of tax cuts in the package, so long as they're aimed at the right people and aren't the core of the bill.  Don't give those GOP slimeballs and their lickspittles in the COM any serious traction.

    He needs the tax cuts because he promised them.  His job now is to ensure they don't compromise the rest of the bill.

    "It's not the side-effects of the cocaine; I'm thinking that it must be love."

    by Twilight Jack on Mon Jan 26, 2009 at 10:34:44 AM PST

  •  Not all tax cuts are the same (0+ / 0-)

    I guess you and your idol Krugman are not smart enough to realize this.  I know a lot of people who make under $50,000 and are very excited about the prospect of a tax cut.  But, when you hear tax cut, you think only of Bush's tax cuts.  The GOP looks foolish right now.  Obama reached out to them, and they are still fighting.  

    •  Krugman understands multipliers, the diarist? (1+ / 0-)
      Recommended by:
      Murdershewrote

      Not all tax cuts are equal, but it's awfully convenient that the President favors ones which grow the economy while the GOP favors the other kind.

      source:  "A rescue plan for Main Street" by Irons & Pollack at The Economic Policy Institute, December 17 2008

      Muphry's Law: if you write anything criticizing editing or proofreading, there will be a fault of some kind in what you have written.

      by opendna on Mon Jan 26, 2009 at 11:38:50 AM PST

      [ Parent ]

  •  Obama says you FAIL. (0+ / 0-)

    TonyZ: President Obama's stimulus plan includes tax cuts for no reason other than to kiss some Republican ass.

    The President is honoring a campaign promise. (Oops! Is that a reason other than kissing GOP ass? Yeah, I think it is.)

    Welcome to the world of YouTube.

    Muphry's Law: if you write anything criticizing editing or proofreading, there will be a fault of some kind in what you have written.

    by opendna on Mon Jan 26, 2009 at 11:32:34 AM PST

  •  percentages are tricky (0+ / 0-)

    think of it this way.
    the infrastructure amount allocated as it stands is ~ 153b (18% of 850b).
    what if there were no tax cuts (33% of 850b as it stands in the bill now) in the bill? That means the whole bill totals 570b. Now the infrastructure amount (153b) will come to 27%. The rest (417b or 73%) goes to the states. what we should find is what the states are going to do with it?
    what i mean to convey is that maybe 150b for infrastucture development is sufficient right now according to the administration. And if we can get more people to sign on to the bill with additional tax cuts, then it is welcome since Mr O had promised some tax cuts to 95% of working families during the campaign. what we need to find is  whether 150b is close to the amount of money required for infrastructure development. Without knowing that the percentages do not mean anything. imho.

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