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July 20, 2010

Stimulus vs. Tax Cuts

As we all know, Republicans are willing to extend the Bush tax cuts for the rich (without paying for them), and yet they've filibustered every effort to stimulate the economy, extend unemployment benefits and create jobs. Their reasoning? Tax cuts stimulate the economy, they say, but stimulus spending -- specifically ARRA and any additional stimulus spending -- doesn't work.

Of course they're extraordinarily wrong.

FACT: Every dollar spent on unemployment benefits creates $1.61 in economic growth.

FACT: Every dollar spent on the Bush tax cuts only creates $.32 in economic growth -- that's a 68 cent loss on investment.

Via USA Today, here's the return on investment chart from Moody's Analytics. Hardly a left-wing outfit.

stimulus_vs_taxcuts.jpg

I know the Republicans can do the math. So it's not a stretch to accuse them of supporting the Bush tax cuts and opposing more stimulative actions because they're interested in sabotaging the economy and, thus, the president. This has to be shouted into every TV camera every day by every member of the administration starting now.

(big HT Joe Wosik)


Filed under: Economy || Jobs || Republicans || Stimulus || Tax Cuts

Posted By Bob Cesca | July 20, 2010 8:00 PM

Comments

"This has to be shouted into every TV camera every day by every member of the administration starting now."

I disagree. The shouting should have started a year and a half ago, and should have come from everyone with a D after their name.

Posted by: alopecia [TypeKey Profile Page] at July 20, 2010 9:09 PM

The Republicans don't care about facts and most of the media doesn't either.

Posted by: J M Ashby [TypeKey Profile Page] at July 20, 2010 9:28 PM

I don't know if anyone's ever accused a Republican of being able to do math before. They'd probably take it as an insult.

Posted by: Andrew Smith [TypeKey Profile Page] at July 20, 2010 10:09 PM

Amen, brother. I highly recommend this On Point with Tom Ashbrook show from NPR. http://www.onpointradio.org/2010/07/arguing-our-tax-future Douglas Holtz Eakin gets his clock cleaned by Dean Baker. It's the most perfect discussion about economic policy I've ever heard, I'm going to look for some writing by Dean Baker. He was really good.

Posted by: Jim in Michigan [TypeKey Profile Page] at July 20, 2010 10:48 PM

Bob and J M Ashby don't care about facts either. Case in point: stop talking about the Bush tax cuts for the rich. The tax cuts were across the board and letting them expire will result in tax increases for EVERYONE.

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Unless Congress takes action and President Obama goes along, rates will go up for everyone -- not just a sliver of the wealthiest Americans. The current six rate brackets of 10%, 15%, 25%, 28%, 33% and 35% will be replaced by five new brackets with the higher rates of 15%, 28%, 31%, 36% and 39.6%.


http://finance.yahoo.com/taxes/article/110005/how-the-expiring-bush-tax-cuts-affect-you?mod=taxes-advice_strategy
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It'd be nice if Bob reported the facts once-in-a-while. With all that snark about "the serious people in real media", perhaps Bob should ... you know ... take a look in the mirror occasionally.

Posted by: Allen Frederick [TypeKey Profile Page] at July 20, 2010 11:58 PM

Well shit, all we need is to spend all the free money or created money we have on food stamps. Every dollar is 1.74 return, what the f&*% are we doing spending on anything else.

Moody, thanks for the insight.

By the way, the captions in each column are incredibly scientific. ("I did not have sexual relations with that woman") What the hell is increased infrastructure spending anyway. Define that. Lets drop 2 million on speeding cameras.

Craziness, please let me know when you think lowering the cost of doing business for companies that create jobs isn't going to help.

Simulate, then, depress. What happened with cash for clunkers, the housing bill. Gone now. What are we left with.

I think we should stimulate Bob's page, pay 40 million people to comment on his site, say 3000 bucks a month for a few years. Get some sponsors going, advertising, more money to Bob. Genius...

Allen, tone it down a little. And to all others, sorry for the snark.

Posted by: indyfurnace [TypeKey Profile Page] at July 21, 2010 12:24 AM

@Allen - First of all, it's likely Congress and the president will make the Bush tax cuts permanent for everyone earning less than $250K. The rest will expire -- an expiration built into the law by the Republicans. Secondly, the Bush tax cuts disproportionately benefited the very rich. There's nothing inaccurate about what I wrote.

Posted by: Bob_Cesca [TypeKey Profile Page] at July 21, 2010 8:03 AM

Nice post Bob. Repigs are all about the rich stayin' rich. The economy as a whole is immaterial to them, hence the perception that their policy ideas are irrational.

Posted by: Radical SAHM [TypeKey Profile Page] at July 23, 2010 3:46 PM



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