Over at Capital Commerce, James Pethokoukis wants to feed the beast now so it can be starved later. He warns Republicans not to support the stumulus bill because it will make it harder for them to cut taxes later. The money quote:
The lesson of the past quarter century is that big deficits make it more likely that taxes will raised, as in 1982, 1990 and 1993.
But not, of course, 2001 - 2008.
Good Grief
So what else is new? Republicans are rearranging deck chairs while the Titanic sinks.
Didn't they listen to Obama's speech today?
They can be obstructionist or they can help load the lifeboats. Let's salvage what we can and work to rebuild a new economy.
People are suffering and dying, and they're playing politics? The suicide rate, and attempted suicides (in case you all didn't notice) are soaring. Crime is also rising, big time.
It's 1930's all over again. Time for effective action -- no room for idiocy right now. We just had 8 years of that, no need to replay those tapes.
Taxes (revenues) will have to come up either way...
whether we're talking about new tax cuts for stimulus II, or not. The distressing part of the CBO report was that the fiscal outlook HAS gotten dramatically worse since CBO's last forecast, because the economy has gotten so much worse. And even with CBO's economic forecast building in a recovery, and even with their revenue forecast assuming current law with all the Bush tax cuts expiring at the end of 2010, the new baseline outlook shows $2 trillion less in revenue over 10 years than CBO previously counted on in their last forecast (September). We already didn't have enough revenue for the next ten years (and the previous eight in fact) before the current recession. Now we have even less. To me it's clear that our revenue system is (already) in crisis. It is simply insufficient to pay for all our spending needs--no matter how successful we may be in the future at damping down health care spending. I am hoping that the Obama Administration recognizes the need to come up with a broader, more efficient, fairer, and more sustainable federal revenue base.
More jobs = more tax revenues
If the stimulus works to create actual jobs (not just the "throw money at banks and rich people so they can hoard it" method we have under Bush-Paulson) then more people will be paying taxes, maybe a million more people or two million or whatever. Obama is saying these are projects that will put people to work (building roads, bridges, electric grid, etc.), and that means jobs that provide income and people pay taxes on that income.
And the ripple from those jobs will create or sustain other jobs (services, retail) in the communities where those projects are initiatied. People who earn money go out and spend money. It's that ripple thingy.
So . . . when people are employed we have more tax revenue.
If the program works as it should we will reap revenues from these investments. Right?