Thursday, February 26, 2009

Give Him a Chance?

Before the President's recent address to Congress and certainly after we've been hearing that we shouldn't be too quick to judge Mr. Obama's ideas, that we should give him a chance to try.

Compromise, these folks point out, is an inevitable part of the politics, and they're right.

But we can't be too quick to compromise for the sake of compromise, nor can we let the Democrats do whatever they want in the name of "giving them a chance." Why not?

When you want to try out a new hairstyle, you can say, "If I don't like it, it'll grow out." (Well, most people can say that.)

But we're not talking about haircuts. If we "let them try" to fix our health insurance system, if we "give them a chance" to create massive new entitlements, we're not talking programs that can be quickly and easily shut down if they don't work out.

These things always have incredible staying power. And generally the political will to even try to shut them down doesn't appear until they can be seen to have done major damage to our country.

Think about welfare reform. Welfare created a permanent underclass, illigetimacy rates went up, and poverty rates were flat. It only took 30 years to finally try some real reforms.

This isn't to say that we shouldn't compromise. We must; we have no choice. The question is where and how to compromise. That's a question we'll be examining over the course of the coming weeks.


Vinny said...

It only took thirty years to figure out that tax cuts for the rich don't produce prosperity.

ChrisB said...

Pardon my stepping on the Democratic talking points, but we've never had "tax cuts for the rich." (We've also never had tax increases on the rich. Everyone always pays.)

When we cut tax rates on everyone, the economy gets a fresh infusion of capital and government receipts increase -- it's worked at least three times in the last 50 years.

Our problems today are due to an over-dependence on credit and letting our energy needs get out of hand, not "tax cuts for the rich."

But either way, tax cuts -- and tax increases -- are relatively easy to undo. New "entitlement" programs, those are hard to undo.

Vinny said...

If they were not “for the rich,” how come the prospective expiration of the Bush tax cuts provokes so many complaints about “class warfare” and “attacks on wealth” from Republicans?

ChrisB said...

They're complaining because Obama & co. want to rescind the Bush tax cuts only on the rich. The rest will more or less remain.

Which of course raises the question: Will "the rich" be as slippery now as it was during the campaign? Many have already said that the things Pres. Obama has promised to do cannot possibly be paid for only by the proposed tax increases on the rich.

Vinny said...

Let us speak accurately here. Obama is not "rescinding" anything. The Bush tax cuts are expiring because the Republicans chose to enact the largest temporary tax cut they could rather than a smaller permanent tax cut.

There is every reason to question how Obama is going to pay for things and I expect it to generate a lot of debate. However, he seems to be embracing a level of transparency in the budget process that we have not known for a long time. I find that very encouraging.

ChrisB said...

I was imprecise. Though he talked about rescinding the tax cuts, he has lately said he would simply let them expire. There is of course no real difference.

In the end, what's important is that Pres. Obama knows that raising taxes on "the rich" will not increase government revenues but he thinks it's the right thing to do because it's "fair."

Vinny said...

I don't think that the YouTube clip supports your assertion about what Obama knows.

ChrisB said...

Sorry. Try again.

This piece includes the same thought: "a deep moral imperative to make our society more just. ... It will mean there is again a fairer, more equitably shared tax burden on the vast majority of Americans."

Apparently having the top 50% paying 97% of the taxes isn't fair enough.

Vinny said...

My dispute was with your assertion that Obama knows that the tax increases will not increase tax revenues. I do not think that he does know that.

ChrisB said...

I think if you watch it again you'll see that he at best half-heartedly denies it. He then blows off the whole question because raising taxes is "fair" no matter the consequences.

But if Charlie Gibson is asserting that this is true, you can assume most everyone accepts it by now.

Vinny said...

One thing to recognize is that Gibson is only talking about the capital gains tax. The timing of that tax is uniquely within the control of the taxpayer. You would always expect to get a spurt in revenue after the capital gains tax is cut because anyone who was planning to sell a capital asset will wait until after the tax cut if they are able to do. You would not see a similar reaction in the income tax because most people have much less control over when they recognize income. You probably would not see any reaction in the estate tax because people have very little control over when they die.

I have read enough economics to know that there are plenty of economists who would not agree with Gibson's characterization of the issue.

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