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He's advocated for a complete expiration of the Bush tax cuts, like Howard Dean. While thats a minority position in the progressive community, its not a tiny minority. The thing is Jeffrey Sachs is completely baffling on his stands on fiscal policy, and has had run-ins with Krugman and Delong. On budgetary matters he's very liberal, he's advocated for a budget that has higher tax rates and slashes defense, while putting more government involvement into the healthcare system like a Public Option along w/ the ACA.

But you would think someone with that view towards budgetary matters would favor Keynesian counter-cyclical fiscal policy, but he hates that. He's also a big time deficit hawk and is anti-keynesian. He was against the Recovery Act and American Jobs Act, and for the same reasons: they are short-term spending that will excarcerbate our deficit outlook and not fix the structural problems with our economy. He calls ANY stimulative measure simply re-inflating the bubble while harming the deficit.

So it makes sense for him to want all tax cuts to expire because he's less concerned about the economic impact rather than the structural change the revenue would bring to our budget outlays. In fact, for someone like that, the fiscal cliff is probably an ideal budget package.

As a matter of math, I agree with Sachs that longterm, even the 1.6 T in revenue that Obama was initially asking for is not enough to protect the Social Safety net from harm in the future. You would need at least 2 T along with big cuts in defense. Since big cuts in defense will be tough, its safe to say 2.3-2.4 T would be the number to reach.

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Comment Preferences

  •  Who?? (1+ / 0-)
    Recommended by:

    You mean the fuckwit who advised the Russians and Eastern Europeans how they could turn their countries into oligarchies, lower life expectancy, sell their women into prostitution, initiate a homeless problem, and make their currencies worthless?  That economic genius?

    •  Give Sachs a break. (0+ / 0-)

      The things you cite happened, and Sachs deserves some (but surely not most) of the blame. But OTOH they were a long time ago, and Sachs more recently has argued for debt forgiveness and substantially higher spending by rich countries on poor countries' infrastructure and the health and education of the poorest of the world's poor.

      "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

      by HeyMikey on Wed Jan 02, 2013 at 02:13:21 PM PST

      [ Parent ]

      •  How about give the people he screwed over a break? (0+ / 0-)

        He goes into the same dunce brigade as Milton Freidman.  There are pensioners in Chile and Belarus and Russia living out shortened lives of penury because of those two "experts" on how the free market helps everyone.

        What he is arguing for now is too little, too late, to make up for the social damage his advice has wrought.

  •  Sachs is mostly right (0+ / 0-)

    I think he doesn't understand monetary policy, and is completely wrong there.  

    But on the stimulus, his main objection was that it was largely things like tax cuts and transfer payments which were predictably ineffective, and which ended up hurting the political will for more effective public investments that are needed.  He wouldn't have opposed the Obama stimulus necessarily, if it had made significant investments in infrastructure.  A measly $100B there was not enough.  

    I agree on this deal though, it again trades $3.6T in permanent tax cuts, for a temporary extension of inflated transfer payments.  It does nothing at all to help the economy.

    For anyone who makes less than $200,000, and more than $30,000, there is pretty much no difference between Obama and Bush.  For the others, the difference is much less important than fixing the structural problems in the economy would be.

    Lettting the fiscal cliff occur would have actually been better structurally than this deal.

  •  Sachs has been wrong about 3rd world poverty... (0+ / 0-)

    for eons despite being a nominal 'expert', so why should he be any different on deficits and U.S. economic issues?

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