Search This Blog

Wednesday, December 21, 2011

Even the Wall Street Journal recognizes the suicide pact

They're worried.

GOP Senate leader Mitch McConnell famously said a year ago that his main task in the 112th Congress was to make sure that President Obama would not be re-elected. Given how he and House Speaker John Boehner have handled the payroll tax debate, we wonder if they might end up re-electing the President before the 2012 campaign even begins in earnest.

The GOP leaders have somehow managed the remarkable feat of being blamed for opposing a one-year extension of a tax holiday that they are surely going to pass. This is no easy double play.

Republicans have also achieved the small miracle of letting Mr. Obama position himself as an election-year tax cutter, although he's spent most of his Presidency promoting tax increases and he would hit the economy with one of the largest tax increases ever in 2013. This should be impossible.

House Republicans yesterday voted down the Senate's two-month extension of the two-percentage-point payroll tax holiday to 4.2% from 6.2%. They say the short extension makes no economic sense, but then neither does a one-year extension. No employer is going to hire a worker based on such a small and temporary decrease in employment costs, as this year's tax holiday has demonstrated. The entire exercise is political, but Republicans have thoroughly botched the politics.

Let's ignore the usual WSJ claptrap about Obama being a 'tax and spend' liberal, planning one of the biggest tax increases ever. He's never proposed anything other than letting the Bush tax cuts expire for the richest of Americans, which considering the current state of the deficit and the low ration between tax revenues and GDP is essential to closing the deficit.

Secondly, the editorial dismisses the payroll tax cut because it's employers won't be tempted to hire based n a 2% lower payroll tax cut. Probably not, but it doesn't even occur to those 1% brains that the tax cut puts extra money in the pockets of 160 million working Americans who might actually go out and spend that money. Most estimates peg the benefit of the tax cutadding 1 to 1.5% to GDP this year as well as job losses or gains depending on which way this circle of idiocy plays out. That doesn't enter their 1% minds.

Remember this is the paper that called people collecting unemployment or those earning so little they barely paid Federal income taxes. "those lucky duckies".

No comments: