I can't believe there is actually a serious discussionabout shooting our stimulus wad on $300 billion in corporate tax cuts.
Everybody should read this transcript from yesterday's Democracy Now.
Here's a quote that tells you all you need to know from Arun GuptaGupta:
So, twenty-five to thirty cents for every dollar spent for business tax cuts versus unemployment, infrastructure, food stamps, you get about $1.60, $1.70. So it has a much bigger stimulus effect.
I'm not sure if Gupta's math on the multiplier effect is exactly correct. And many non-Keynesian economists don't believe in the multiplier effect at all. But one thing is for sure: if you do believe in a stimulus, you should be trying to get money in the hands of those who are most likely to spend it, that is, the poor and unemployed.
So why all this talk of concessions to Republicans by giving tax breaks to corporations likely to hoard the money? To garner Republican support, of course. There is a contingent of Blue Dog Democrats in the House, anything but a progressive majority in the Senate.
But, at the same time, the President-elect has political capital- a fairly large amount of it. Will Evan Bayh or Diane Feinstein really want to be seen as the Senator that sunk the Obama Presidency in its infancy? Somehow, I don't think so.
We could be headed for a major Depression unless we act now to get money in people's hands. Let's stop horsing around with the idea that giving money to corporations will benefit anyone except the executives of those businesses. If we really want to do something to help big companies, let's use some stimulus money to finance the transition to universal health care.