Bad Deal; Wrong Direction

[Donnachaidh]

http://www.ourfuture.org/blog-entry/2010124907/bad-deal-wrong-direction

So now we have the deal.

In a society of extreme inequality, the rich – well represented by a unified Republican claque – will make out like bandits: An average tax cut of $25,000 a year for the top two percent (with much of it in six figure numbers for the wealthiest of the wealthy). A stunning giveaway to the biggest estates – exempting estates under $10 million for couples from taxation and limiting the top tax to 35%. Dissolute heirs to the wealthy can rest easy in troubled America. And of course, an adjustment of the alternative minimum tax which benefits almost entirely the affluent.

In a period of mass unemployment, the result of failed conservative economics, we get in return a largely conservative recovery package built around tax cuts. No public investment to create jobs. No aid to states and localities to save the jobs of teachers and police. No investment in new energy to keep us from defaulting in the race to capture a slot in the green industrial revolution.

Instead, a 100% write off of all business investment over the next year, the vast bulk of which will go to investment that would have been made anyway, adding nothing to the economy. (And worse, a significant percentage in investments that move jobs abroad, not build new plants at home). A 2% payroll tax cut that will put small amounts of money in worker’s pockets each month, which will unlikely to be noticed and surely to be spent – so among the most efficient of these measures. A continuation of child tax and tuition credits that are sensible and relatively progressive measures. And most important, the extension of unemployment insurance for the long-term unemployed, the most effective boost to the economy in the package.

It’s a lousy deal, but ironically, a better one than most liberals feared would come out of the White House. That may be a better measure of liberal dismay at the White House, than of the merits of the deal.

More at the link ---