Me and Bernie Sanders
I don't normally use this blog for self-promotion -- that's what Facebook is for -- but I'm going to make an exception today because Senator Bernie Sanders mentioned me 8 times yesterday in his widely-viewed, Mister-Smith-Goes-to-Washington, one-man filibuster against the tax deal recently reached between President Obama and Republican leaders. More particularly, he quoted from a post that I did here at Capital Gains and Games on November 19. In that post, I questioned the wisdom of a temporary cut in the payroll tax rate on the grounds that Republicans will never allow it to expire. They will claim that to do so would constitute a massive tax increase on working Americans. Hence, this "temporary" tax cut will become permanent, thus permanently undermining Social Security's finances and paving the way for conversion of that system into a de facto welfare program, which would then become politically vulnerable to effective abolition through privatization. Contrary to Republican dogma, I don't believe that cutting the payroll tax will do anything to expand employment because labor costs are not holding back business hiring, but rather a lack of demand for business output. I discussed this at greater length in my Fiscal Times column yesterday.
Excellent column! We need
Excellent column!
We need more aggregate demand and our political system lacks the will to do anything about it.
Up is down, black is white...
...when socialist Bernie Sanders gets his arguments from conservative Bruce Bartlett, and conservative Bruce Bartlett takes it as a compliment.
I would never have guessed
That I'd agree with a Democratic socialist and a former adviser to Reagan in the same day.
I listened to about half of it yesterday and wondered if you were going to notice the name dropping.
Bruce and Bernie
The week's wise men.
Starve the Beast
Sounds like a great plan to me. Keep it coming, GOP!
What About Retirement?
"Contrary to Republican dogma, I don't believe that cutting the payroll tax will do anything to expand employment because labor costs are not holding back business hiring, but rather a lack of demand for business output."
First, I thought I heard that the payroll tax cut was only for workers, not employers.
Second, I believe people are hoping that workers will spend the payroll tax cut. I'm hoping they will pay down debt. I'm afraid it will go into higher prices like for oil, gasoline, and health care.
Third, what if demand and supply for business output is about right but there are still too many workers? Does the question become how are more retirees created?
Pay down debt? The average
Pay down debt? The average salary in this country is $40K, and the cut amounts to getting 2% back. What debt is getting paid off with $800?
It's a Question of Priorities
What the Republicans will do with the payroll tax cut in the future is anyone's guess. What is not speculation, however, is that the temporary 2 percent payroll tax reduction was pushed by Obama, not the Republicans. At least the story according to Austan Goolsbee in his presentation on the "White House Whiteboard" (seee Samwick post) where he lists it as an "Obama Priority" (he also claims that this part of the foundation that is going to solve "these problems"). So, if the Republicans were so interested in permanently reducing the employee side of payroll taxes, why wouldn't this have been one of THEIR priorities from the start?
Payroll tax cut will expire
This theory doesn't make sense - many Republicans are skeptical of the payroll tax cut b/c it backfills the Social Security Trust Fund with general fund revenues. General fund revenue transfers to the OASDI Trust Fund are what Republicans are trying to avoid by reforming Social Security. Making this cut permanent would make those transfers permanent. This is unacceptable to Republicans and therefore you will see the payroll tax holiday expire as planned next January.
See former Deputy NEC Director and current Social Security Commissioner Chuck Blahous for an example of the legitimate concern this raises amongst Republicans: http://www.economics21.org/commentary/payroll-tax-cut-effective-stimulus...
What Republicans will let a tax cut expire?
Not the crop our country just elected.
Here are two of the things Republicans don't like:
--increases in tax rates
--transfer of general funds to OASDI trust fund
You are assuming that Republicans will be forced to choose one of the two options above.
I assume that they will choose neither option, leaving Social Security with reduced payroll tax revenue and no replacement from general funds.
it's a great day for America, everybody
Congrats on the many mentions.
It's an unqualified Good Thing, regardless of whether or not you agree with Sanders' and Bartlett's assertions, because Bartlett is always well reasoned and honest in his arguments. More reasonable discourse!
And bruce, as a conservative,
And bruce, as a conservative, shouldn't you celebrate steps towards abolishing social security? Or are you finally removing the pretense that you are still a conservative if you are worried about a horribly inefficient government program being preserved?
In my reading of Bruce, he's
In my reading of Bruce, he's a "old style" conservative, concerned with social stability and fiscal responsibility. I contrast this with the "new style" conservatives, who have spent the last three decades or so working to destabilize the nation, because that was the only path they can find to undo programs that were adopted, to popular acclaim, around 75-80 years ago.
Social stability is radical liberalism, and overturning the nation is conservatism. We've fallen down a rabbit hole and lost our way. (Of course, Alice in Wonderland was written as political satire, based on the politics of England at the time.)
SS "horribly inefficient?" I
SS "horribly inefficient?" I don't think so; the administration expenses are far less than those of private sector investments, even if one doesn't put his money with a Madoff.
It is no coincidence that the rise of opposition to SS correlates with the decline and death of those for whom pre-SS days lie within living memory.
increasing demand
But what you are saying Bruce seems to make no sense. Won't giving workers more take home pay to spend increase demand? What am I missing here??