Editore"s Note
Tilting at Windmills

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January 11, 2008
By: Kevin Drum

QUOTE OF THE DAY....From the Wall Street Journal editorial page:

We've been saying for some time that the economy could use another tax cut....

Fancy that.

Kevin Drum 12:28 PM Permalink | Trackbacks | Comments (33)

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Tax cuts hell, didn't our Treasury Secretary a day or so ago talk about sending out prebates or some such nonsense? My guess is they arrive November 1st.

Posted by: jerry on January 11, 2008 at 12:33 PM | PERMALINK

There is no economic problem that could possibly exist that can't be solved with a tax cut. Didn't you know?

Posted by: Alan on January 11, 2008 at 12:37 PM | PERMALINK

Zero percent taxes, and infinite revenue!

Posted by: Gore/Edwards 08 on January 11, 2008 at 12:40 PM | PERMALINK

Well, it's true. They have been saying that for a long time. You should give them special credit when they say something that's true, it happens so seldom.

Posted by: anandine on January 11, 2008 at 12:42 PM | PERMALINK

Republican policy for a booming economy: cut taxes. Republican policy when we are sliding into recession: cut taxes. Republican policy when we are going to hell in a hand basket: cut taxes. This isn’t a policy; it’s an obsessive compulsive disorder.

Posted by: fafner1 on January 11, 2008 at 12:43 PM | PERMALINK

Yes, a tax cut with gold now popping $900/ounce and threatening $1,000... stagflation in spades.

Effing WSJ op-ed morons.

Posted by: SocraticGadfly on January 11, 2008 at 12:43 PM | PERMALINK

[Trolling deleted]

Posted by: Al on January 11, 2008 at 12:45 PM | PERMALINK

Stagflation happens when the money supply is loose. Tighter money policies and a stronger dollar are needed to restrain inflation. Tighter money supply in today's environment would restrain inflation at the expense of a recession. A fiscal stimulus would be needed to fight the recession.

Fiscal stimulus can be more spending, but it is more efficient to put the money in people's pockets so they can use it for the most pressing needs of workers and their families. A temporary tax cut for those who pay taxes, and a rebate for lower income types whose tax burden is mostly payroll tax and not income tax would do the trick.

Posted by: Otis on January 11, 2008 at 12:59 PM | PERMALINK

Probably not what the WSJ has in mind, since their readers don't worry about FICA, but rbat the FICA tax to everyone making under $50,000. Think they would support that?

Posted by: Tigershark on January 11, 2008 at 1:02 PM | PERMALINK

We've been saying for some time that the economy could use another tax cut...

And they've been wrong the whole time. Given the way Bush cuts taxes, why should we assume that another tax cut for the rich will do any good for the economy or the middle class.

Posted by: tomeck on January 11, 2008 at 1:02 PM | PERMALINK

Look at the graph that goes along with this sophistry. Ask yourself, does this graph display what the WSJ thinks it does? That GDP growth looks fairly pedestrian and completely uncorrelated to the tax cuts.

Posted by: qarll on January 11, 2008 at 1:11 PM | PERMALINK

So the WSJ has declared monetary policy to be impotent. Over at Angrybear, I muse what would Brad DeLong and the Marginal Revolution fellows have to say - as I dump on the rest of this incredibly stupid set of "reasoning". Stephen Moore must want to compete with Don Luskin for Brad's Stupidest Man Alive contest.

Posted by: pgl on January 11, 2008 at 1:16 PM | PERMALINK

The bit in the Journal today that got me was the letter from the small businessman whining that a health care mandate will put him out of business and put all his employees on the street. When the government changes trade policy and people get fired, the Journal calls it "Schumpeter's process of creative destruction" and it's a good thing. Why is it bad here?

Posted by: Rich McAllister on January 11, 2008 at 1:19 PM | PERMALINK

How about rebuilding our water, sewer, bridges, mass transit? How about paying college tuition for every student whose parents make less than $60k? How about buying and installing screening devices for shipping containers and airport luggage? How about making our wait times in line at airports 15 minutes again? How about upgrading our national parks to increase tourism? How about running high speed internet nationwide? Wouldn't any/all these things stimulate the economy and have a better effect 10 years from now than a tax cut?

Posted by: Th on January 11, 2008 at 1:33 PM | PERMALINK

some time=119 years

Posted by: reino on January 11, 2008 at 1:36 PM | PERMALINK

These conservatives are certifiably insane. After eight years of utter ecnomic malaise and piling up mountains of debt that our great-grandchildren will be paying off, these criminals want to keep right on borrowing from the Chinese and Saudis???

Based on the long-term damage they have done to the United States, can't we just declare the GOP a terrorist organization and begin bombing and strafing RNC headquarters immediately?

Posted by: The Conservative Deflator on January 11, 2008 at 1:37 PM | PERMALINK

"When the only tool you have is a hammer..."

Posted by: Frank on January 11, 2008 at 1:50 PM | PERMALINK

How about ...

Those things would be nice, but while the world is filled with terrorists with box cutters and Iranians with speedboats, we have to spend all our money on starting wars and blowing things up until everyone else understands we're really nice people and just want them to have the American way of life.

Posted by: AJ on January 11, 2008 at 1:53 PM | PERMALINK

If the Wall Street Journal had its way, taxes would be 0% and the world would be run through anarachy (since there would not be any government).

Posted by: mfw13 on January 11, 2008 at 1:57 PM | PERMALINK

I wonder why the new publisher of The Wall Street Journal continues to let the idiocy of the editorial page infest an otherwise very good newspaper.

Anyone who is persuaded that Laffer's analysis of taxation is valid is unfit to make comments about tax policy. Anyone who allows Laffer space to write more of his silliness is decreasing the value of the product. If Rupert wants to increase the value of his company, he will fire the entire Opinion staff and replace them with people who actually are familiar with the issues.

Posted by: freelunch on January 11, 2008 at 2:00 PM | PERMALINK

We're Americans, and we shouldn't have to pay taxes. The Saudis should give us all their oil, the Japanese all their money, and the Chinese all their cheap toys. It is God's will. We'll bomb them all if they don't get right with the Lord.

Posted by: Conservatroll on January 11, 2008 at 2:15 PM | PERMALINK

Last Sunday, our local newspaper had an article about the difficulties discovered by people who are living in condos for the first time in their lives. In addition to the usual problems with noise, parking, and loss of privacy experienced by many former home owners, the biggest problem was people not willing to pay the fees for maintenance and improvements to the entire complex.

One lawyer representing condo board members said, “Everyone wants the benefits, but nobody wants to pay for them.” To me it sounded like a microcosm of our entire society.

Posted by: emmarose on January 11, 2008 at 2:31 PM | PERMALINK

I was up to my ears in credit card debt. Solution: I quit my job and got a lower paying one, and a bunch more credit cards. Worked out great.

Posted by: BSEcon on January 11, 2008 at 2:32 PM | PERMALINK

I've been saying for some time that I need to win the Powerball lottery, too.

I think I get it, though. When times are good, cut taxes, because we don't need all of that revenue. When times are bad, cut taxes, to stimulate the economy.

Yeah - it is *always* a good time for tax cuts!

Posted by: Tripp on January 11, 2008 at 2:47 PM | PERMALINK

The richest part of that editorial was this gem...

"As for "spending it," we tried this a few years back and it didn't work very well. As part of the grease to pass his 2001 tax cuts, President Bush agreed to a $300 rebate ($600 per couple) urged on him by Senate Democrats."

So, the Dems are guilty of not lowering taxes when they've already been guilty of pushing for lower taxes. And remember, it wasn't Bush's fault; it was those nasty Senate Democrats. Am I stoned?

Posted by: yocoolz on January 11, 2008 at 3:03 PM | PERMALINK

Whenever I hear that kind of talk I'm (weirdly, I'll admit) reminded of blood-letting. Just about anyone could use a good blood-letting (at least up until the end of the 19th century or so). And like blood-letting, a good tax cut often helps. Of course, it also just as often kills the patient, but we don't want to focus on the negative.

More tax cuts, but this time only for those with incomes in excess of $100 million, since they're really the ones who need the money the most to create all these jobs.

Posted by: Jim Pharo on January 11, 2008 at 4:50 PM | PERMALINK

John Edwards "got it" a long long time ago.

Hillary is just now "getting religion".

Obama thinks his suit is beautiful and that's what really counts.

Posted by: MarkH on January 11, 2008 at 8:12 PM | PERMALINK

This never ending sequence of tax cuts is a kind of monetary Zeno's Paradox.

Or st petersburg paradox. Or maybe even the Banach Tarski paradox

Posted by: CSTAR on January 11, 2008 at 11:18 PM | PERMALINK

We've been saying for some time that Bush is the Worst President Ever.

Posted by: craigie on January 11, 2008 at 11:31 PM | PERMALINK

I finally figured out what certain Republicans have in mind for our country:

Death by a thousand tax cuts.

A slow, bleeding death, with tax cut after tax cut after tax cut, cutting into our nation's revenues, crippling our democratic form of government, with the intent of overthrowing our nation and establishing a permanent Republican majority.

Death by a thousand tax cuts, draining the life blood of our nation's middle class and poor, creating a permanent transfusion of our nation's life blood into the bank accounts of only the top 10 percent of our nation's wealthiest citizens.

Banana Republic. Banana Republicans. Are these guys that crazy? Or are they just twisted, warped parodies of human beings and American citizens?

Posted by: The Oracle on January 12, 2008 at 3:21 AM | PERMALINK

What craigie said...

Posted by: The Conservative Deflator on January 12, 2008 at 10:11 AM | PERMALINK

Apparently, what the Wall Street Journal thinks the country needs is a trillion dollar annual deficit . . .

Posted by: rea on January 12, 2008 at 11:11 AM | PERMALINK

"Economy is good? CUT TAXES!! Economy is bad? CUT TAXES!! Got a toothache? CUT TAXES!!"

Posted by: Thlayli on January 12, 2008 at 11:30 AM | PERMALINK



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