I am not angry about the payroll tax holiday expiration.

Last edited Tue Jan 8, 2013, 07:23 PM - Edit history (2)

I repeat, I am not angry. Or surprised. So don't bother reading this on the Rush Limbaugh show.

With that said, the expiration of the PTH in 2013 (as opposed to an extension of it) without some counter-balancing new stimulus is a very bad, terrible, no good idea.

The PTH pumped consumer spending worth 0.6% of GDP.

In a very marginal economy... a weak "can go either way" economy... you do not cancel among the most effective dollar-for-dollar forms of stimulus in play, reducing 2013 GDP growth by at least a half point, without replacing that hole in consumer spending somehow.

It is a recovery retarding measure that (along with the rest of austeritypalooza) ensures that the economy of 2013 won't be any better than the economy of 2012. We were on track for a good 2013, so of course Congress (with an assist from the WH) had to put a stop to that.



If someone doesn't like the method of FICA withholding being used as a vehicle for the government to transfer $100 billion to workers (including the working poor) who will reliably spend it, then one must find some other vehicle.

But cutting $100 billion of net consumer spending in 2013 is... well, it is not wise. (And getting the same sized bump in net consumer spending will cost the government more money to accomplish through a less efficient vehicle.)

The White House (which wanted it extended) should have made a PTH extension a very splashy, public demand. At least then, when the Republicans blocked it the public would blame the Republicans for blocking it.