Legal Commentary

Blinders On The Norquist Strategy

By Big Tent Democrat

Matt Yglesias writes:

The deficit is a problem only in the sense that the short-term deficit is currently too small. But this is one reason I’m surprised so many liberals are being so stinty in their praise of the recent tax deal. We’d just all been spending 12 months arguing that contrary to the conventional wisdom, short-term deficits should be smaller. We also spent a lot of time observing that conservative deficit-talk is fraudulent and all they care about is tax cuts for the rich. Then the Obama administration, after a year of fruitless austerity gambits, finally called their bluff. “Fine, you can have your deficit-increasing tax cut extension, but give me some other deficit-increasing stuff that my economists say has a higher multiplier than your tax cuts for the rich.” Now the deal is done, and for all the panels and commissions and all the money Pete Peterson’s spent the parties are coming together to make the deficit bigger.

This is all kinds of wrong. I'll explain on the flip.

First, Yglesias thinks that progressive objections to the Bush tax cuts are based on concern for the short term deficit. Dead wrong. The concern is that extending the Bush tax cuts will lead to cuts in REAL effective stimulus - government spending. This is the "starve the beast" Norquist strategy. Pete Peterson is not going away. He was just quiet about TAX CUTS. When it comes time to cut spending, Pete Peterson will be back.

Second, over the longer term, The Deal will likely make the Bush tax cuts permanent, which will lead either to unsustainable deficits or, more likely, even deeper cuts in the social safety net.

Yglesias clearly has blinders on regarding this issue.

Speaking for me only

Full post as published by TalkLeft on December 15, 2010 (boomark / email).