A Tax Deal Fit For The Gilded Age

A Tax Deal Fit For The Gilded Age
Posted by Zach Carter at 9:26 am
December 7, 2010

President Barack Obama and Congressional Republicans are ready to mortgage the American economy to billionaires in exchange for a few months of unemployment benefits. This deal is easily the gravest economic outrage of the Obama presidency to date, and signals that other political assaults on the economy are ahead.

The basic deal: One year of unemployment benefits, a $40 billion extension of the anti-poverty tax credit, a $120 billion tax cut for workers and some additional tax cuts for American businesses that are already sitting on $1 trillion in cash and refusing to hire new people. In exchange, we get the Bush tax cuts for billionaires, plus an estate tax even more regressive than the worst estate tax implemented by George W. Bush. A few billion for the poor, hundreds of billions for the rich, and nothing—nothing – that will alleviate epic unemployment. It may even fail to prevent the economy from deteriorating further. The best I can say for it is that it will prevent things from getting too much worse.

David Dayen at Firedoglake does some number-crunching and finds $116 billion of actual new stimulus in this deal. He acknowledges that this is a charitable figure, because $56 billion of that total comes from extending unemployment benefits—meaning “not cutting them off”– not exactly a “new” program. Under either calculation, the result is pathetic. The George W. Bush stimulus from 2008 was $160 billion, and featured a roughly similar approach to the stimulative measures in this one: putting money in workers’ pockets. It’s better than not putting money in workers’ pockets, but it’s simply not enough.

This is it, folks—the only economic aid package we are going to see until 2012. If it passes, both parties will praise it as a great bipartisan victory, and critics demanding further economic relief will be told to give it time to “work,” as the worst recession since the Great Depression grinds on and on and on. It will be the stimulus package disaster all over again. And remember, Americans actually liked the stimulus plan when it was enacted. Today, most Americans already want to see the Bush tax cuts for billionaires expire.

The actual consequences of this deal, of course, will be more severe than the political fallout in 2012. We’ll soon hear about “tough choices” facing the country as a result of our allegedly out-of-control budget deficit (bond interest rates, shmond interest rates!). Now that raising taxes on the rich has been taken off the table, those “choices” will translate to devastating cuts in Social Security. After agreeing to useless tax cuts for the rich in the name of economic “stimulus,” Wall Street executives and Congressional Republicans will demand Social Security be slashed, further sabotaging our demand-starved economy, and actually starving our senior citizens.

with stagnate wages and increased productivity. The workers have not shared in the fruits of their labor, only the top 1%.

Any takers? Something charitable?