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December 13, 2010

I support the tax deal

(Washington, DC) My inbox is full of denunciations of the Obama/GOP tax deal, but I support it. Until very recently, additional Keynsian stimulus seemed politically impossible. No one was even talking about it. Now we can have a stimulus package larger than the one enacted in 2009. About 32% is devoted to maintaining the upper-income tax cuts, which are unfair and inefficient as stimulus. But even that part of the bill is likely to have some stimulative effects, and the rest of the package will be better. I'd rather see spending on infrastructure and a small increase in the upper-income tax rate, but those aren't options. The realistic alternative is preserving the status quo, which is worse.

It's fine with me if liberal groups attack the upper-income tax rates. Their critique is valid on its face and could help when the cuts come up for reauthorization in 2012. And it's fine with me if many Democrats in Congress vote against the bill. It's almost always better to vote against an economic package: you can claim you favored something better. So why not let the Republicans take the heat for voting "yea"? But I hope the bill passes and I hope the president gets some credit on the left for it.

I could certainly be wrong in my overall judgment of the bill. I am, however, fairly sure of two points. First, it's a general mistake to evaluate legislation as a "win" for one party and a "loss" for the other. Government isn't a game, and most legislation is either win-win or lose-lose, not zero-sum. The question is whether Americans will benefit, not which party won. Second, it's a mistake to assess this deal as an indication of whether President Obama will be nice or hostile to Republicans. The deal is the deal: it provides little or no information about the future of relations in DC.

December 13, 2010 5:25 PM | category: none



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