Austan Goolsbee: We can't afford $700 billion of tax cuts when we're just going to borrow that money

[Amerigo Vespucci]

Obama Economic Adviser: U.S. Can't Afford Tax Cuts for High-End Earners

Published September 12, 2010

WASHINGTON -- High unemployment must be met with tax cuts for the middle class, the new chairman of President Obama's Council of Economic Advisers said Sunday, but the U.S. can't afford an extension of the Bush-era cuts for high-income earners.

Austan Goolsbee declined to speculate what the unemployment rate might be at the end of the year, but told "Fox News Sunday" that the middle class shouldn't get squeezed by expiring tax cuts.

"The president strongly believes that ... after a decade of astounding squeeze on the middle class that was followed by the worst recession in our lifetime ... you cannot afford to raise taxes on the middle class. We should make that permanent," Goolsbee said.

With the unemployment rate at 9.6 percent, lawmakers are looking for ways to create jobs. Republicans say tax cuts should be extended for people who make more than $250,000. But they are willing to vote for cuts for the middle class even if high-income earners are left out of the mix.

"If the only option I have is to vote for those at 250 and below, of course I'm going to do that. But I'm going to do everything I can to fight to make sure that we extend the current tax rates for all Americans," Boehner told CBS' "Face the Nation."

But Boehner called that bad policy, and that the people who would be denied a tax cut make up about half of small business income.

"Obviously, the top 3 percent have half the gross income of companies we would term small businesses. You don't want to punish these people," Boehner said, adding that spending should be cut to 2008 levels, which he said would be a 20 percent reduction.

"John Boehner has correctly proposed -- the Republican leader in the House -- let's go back to Bush's 2008 budget and you can save like -- something like a trillion, 300 billion dollars just by not spending the money," said former House Speaker Newt Gingrich, who led Congress during four years of balanced budgets in the 1990s.

Gingrich, who also appeared on "Fox News Sunday," added that those who complain about going back to the Bush years should recall that unemployment was a lot lower and "the middle class was much better off."

But Goolsbee argued that the U.S. can't afford to continue the rate for high-income earners.

"What we cannot afford to do is pass 700 billion additional dollars of tax cuts for the millionaires and billionaires at a time when we are just going to borrow that money," he said.

Goolsbee replaced Christina Romer, who left the White House earlier this month to return to teaching at University of California-Berkeley.

http://www.foxnews.com/politics/2010/09/12/obama-economic-adviser-afford-tax-cuts-high-end-earners/

[TexasObserver]

1. he's right

[Amerigo Vespucci]

2. It's the one question Republicans...and D.I.N.O.s...won't answer

"Where's the money going to come from"...because they know exactly where it's going to come from.

[blueworld]

3. I love to watch Boner talk with his sphincter. I hope he talks a lot more.

The top 3 percent are half of all small business owners? On which particular planet?

I'm educatin' meself on Goolsbee as I post, but what he said sounds basically correct so far.

[ProgressiveEconomist]

7. 'The top 3 percent are half of all small business owners?" That's what Boehner,

McConnell, et al want you to HEAR. But if you'll listen very closely, what they actually SAY is that Obama is "raising taxes impacting 50 percent of all small business INCOME. Even that is a lie, of course.

First, Obama is not raising taxes: Republicans raised taxes in advance years ago. Second, as Goolsbee pointed out today on TV, much of the "small business income" involved is reported through tax loopholes by sole proprietors--doctors, lawyers, consultants--particularly on Schedule C.

Third, the maximum the percentage of true small businesses that make more than $250,000 in personal income could be is something less than two percent.

Finally, business income reported as personal income from partnerships and S corporations mostly accrues to millionaires, not what the average person would regard as small business owners.

See https://www.truthout.org/mcconnell-repeats-debunked-lies-to-promote-more-tax-cuts-for-multi-millionaires62606 and click through to some of the excellint links provided there, particularly http://taxvox.taxpolicycenter.org/blog/_archives/2010/8/13/4603774.html .

[blueworld]

8. Thx for the explanation & the links:) n/t

[unblock]

4. "former House Speaker Newt Gingrich, who led Congress during four years of balanced budgets"

love the plug for newtie!

first, the speaker of the house is obviously the leader of the house, not all of congress, but trent lott isn't contemplating running for president, so foxnews is happy to throw him under the bus.

second, newtie took his ball and ran home when his term ran out january 3, 1999. he won re-election but other republican congressmen tried to overthrow him as speaker, so he took his ball and ran home, crying like a baby. seriously, what kind of person runs for re-election, wins, then says nah, screw my electorate?

anyway, the "four years of balanced budgets" during which he supposedly led congress included two years when newtie wasn't in congress!

[L0oniX]

5. "You don't want to punish these people" WTF ...it's us or them!

People just don't get it. Since agriculture became the means of control the rich have kept that control in it's now various forms. They are our enemies.

[madrchsod]

6. oh well, another year of doldrums.....

i guess real reform and growth is political and financial suicide for both parties..

[kentuck]

9. We simply can't afford it...

That's as good an answer as any.

[indepat]

10. Suspect all tax cuts to the uber-wealthy and large corporations since the day the gipper foisted his

brand of voodoo economics on us have been paid for in one of two ways: (1) pilfering the social security trust fund; or (2) increasing the Federal debt by borrowing primarily from foreigners. Fear not for there are so many up-sides to this story: (1) a plethora of very wealthy people are now even much wealthier; (2) the national wealth is much more concentrated among a relatively precious few; (3) income inequality has risen to levels of that of the Great Depression; (4) the US now is at/near the bottom of all industrial nations in quality-of-life rankings; and (5) our nation is so much stronger and better able to respond to any/all emergencies from within and foreign threats due to this additional enormous mountain of debt. Now ain't this some great country of, by, and for the people, or what? ;)