Special report: Still amazed after all these years!
PART 4—IT’S SO EASY (permalink): “It’s so easy,” Buddy Holly once noted.
Today, it’s so easy to get misled by the American “press corps.”
Just consider the op-ed page of Tuesday’s New York Times. Two different columns mused about the expiration of those Bush tax cuts. From these passages, a reader would get an obvious misimpression:
NOCERA (8/9/11): Has any president in American history left behind as much lasting damage as George W. Bush? In addition to two unfinished wars, he also set us on the path to our current financial mess. The Bush tax cuts, which turned a surplus into a growing deficit, have been disastrous. As James Fallows pointed out in a prescient 2005 article in The Atlantic predicting a meltdown, they reduced tax revenue “to its lowest level as a share of the economy in the modern era.” (In its downgrade report, S.& P. suggested that it did not believe that Congress would let the cuts expire at the end of 2012, as they’re supposed to.) Then, in 2003, Bush pushed through prescription drug coverage for Medicare recipients. David M. Walker, then the comptroller general, described 2003 as “the most reckless fiscal year in the history of the Republic,” adding some $13 trillion in future entitlement costs.
CHINN AND FRIEDEN (8/9/11): The longer-term spending and revenue commitments are no better. Certainly spending, in particular on Medicare and Medicaid, needs to be restrained. But the deficits cannot be reined in without tax increases, and the “framework” does little or nothing in this regard. The S. & P. decision to downgrade reflects, in large part, the expectation that Republicans will not allow the Bush tax cuts to expire.
Say what? From those highlighted passages, a reader would surely get the impression that Republicans, or the wider Congress, can refuse to let the tax cuts expire at the end of 2012, as is currently scheduled.
Basically, that isn’t true. Under current law, the cuts are scheduled to expire; Obama could veto any legislative change to that plan. But when you read the New York Times, you’re pretty much asking to be misled.
People who read the New York Times think they’re reading our brightest newspaper. Just to make a long report short, let’s see how the newspaper’s editors finished their lengthy, featured editorial in last Sunday’s edition.
Good lord! The editors seemed to propose that all the Bush tax cuts should expire! That would produce $3.8 trillion in new revenue over a decade, they said (see THE DAILY HOWLER, 8/11/11). But just like that, the editors bailed! They panicked, turned tail and ran.
Yesterday, we showed you most of the passage which follows. Today, we show you one additional sentence. As we do, we invite you to focus on the way the editors bailed:
NEW YORK TIMES EDITORIAL (8/7/11): Here is the bottom line. There is no economically sensible or politically honest way to address the deficit without also increasing revenues and reforming the tax code. The major challenges are these:
LET THE BUSH CUTS EXPIRE Mr. Obama vowed to let the high-end tax cuts (for people making more than $250,00) expire in 2010. But in a preview of the debt fight, he agreed to extend the cuts for two more years when Republicans held unemployment benefits and other measures hostage.
Letting all of the cuts expire at the end of 2012 would save $3.8 trillion over the next decade. Letting the tax cuts expire for those making more than $250,000 would save $700 billion. That would make a real dent in the $2.4 trillion in total deficit reduction envisioned in the debt limit deal.
A sensible and fair approach would be to let the high-end tax cuts expire as scheduled, but keep the other tax cuts for another year. That would keep more cash in the hands of people most likely to spend it and prop up consumer demand while the economy is weak. It would give Congress and the administration time to undertake tax reform.
LET THE BUSH CUTS EXPIRE, the editors boldly seemed to say. But in that last sentence, they took it all back! What do they really want to do? They want to let the high-end tax cuts expire. Then, they want the Congress to get all busy “undertak[ing] tax reform.”
The editors may have some great ideas. They go on to share their basic ideas, including the notion that “all tax rates [should] be lowered, improving incentives to work.” But how would these brilliant, tax rate-lowering ideas actually get through the Congress? If they generate a whole bunch of new revenue, how in the world would they pass?
The editors never tell us. Nor do they say how much new revenue should be produced by “tax reform” in the magical world they’re inventing. The editors dream lovely, if imprecise, dreams. But they seem to have little sense of the real world in which they’re living.
Why do spending cuts always win in our budget debates? In part, because of the type of work displayed in this editorial! One side has been yelling “no new taxes” for decades; this dictum now has the force of law within one major party. The other side fiddles and diddles in silly-bill ways, then announces that it is “amazed” by the way spending cuts always win!
How could the editors pass their “reforms?” They don’t seem to realize that this is an issue. All year long, leading liberals have explained, on-line, that new revenues will be hard to obtain—unless the Bush tax cuts are allowed to expire as scheduled, without legislative adjustment. And this has to mean all the Bush tax cuts. No tinkering could be allowed, since it would have to be passed by the Congress.
The editors still don’t seem to have heard. They dream their dreams about what would be best. They seem to be bold, then they take it all back. They don’t explain how much new revenue they think will be needed. They don’t explain how any of their wonderful dreams would ever get passed by the Congress.
Over time, how much new revenue will we need? Would that $3.8 trillion be too much? The eds skip lightly past such points, thus failing to start a discussion.
People like these are easy prey for the hard-drivers who win these debates. Then, the editors gather about and announce they’re “amazed” by the outcome.
It’s easy to get misled by this elite bunch. Meanwhile, the other side is pounding hard, driving their dumb ideas home.
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