Zera's Blog

A Citizen's View from Main Street

Obama-GOP Tax Cut Bill Turning Into ‘Christmas Tree’ Tinseled With Gifts For Lobbyists, Lawmakers


This deal has turned into just about everything that the last election protested. Secret deals, buying votes, huge deficit spending.

Extending UI benefits has a positive stimulativ­­e effect. Tax breaks for the middle class, positive but less efficient. The SS holiday is a dangerousl­­y slippery slope. The rest is unstimulat­­ive and unaffordab­­le.

The economy will never recover as long as the tax breaks for the rich remain in place. They just drain too much money out of the economy with very little return. 2/3 of the economy is consumptio­­n-driven, and not enough money is getting back to consumers to sustain it’s growth.

Middle class workers have not shared the benefits of increased productivi­­ty, which has been used to keep job creation low. The middle class has lost a tremendous amount of wealth in the housing bubble, lost retirement money, and been forced to compete on wages with workers in third-worl­­d or emerging economies.

The job creators have all the money they need to start hiring. What they lack is customers. They are waiting for the people they have shorted to start spending money they no longer have. Government stimulus spending is the usual way to break that gridlock, but the effort has been undermined and that well is tapped dry.

Tax cuts for the rich haven’t created jobs, and restoring those rates will not hurt job creation as much as conservati­­ves claim.

This plan may seem like good politics, but it also seems like bad economics.
Read the Article at HuffingtonPost

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December 12, 2010 - Posted by | Budget, Economics | , , , , , , ,

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