Three
pitches, commentaries and/or analysis of what can be expected from Bush
tomorrow. Should the headline
be More Regurgitated Reaganomics?
Same old, same old? Give
Trickle Down a Chance? If only
they could bring Jack Kemp and Newt out of hiding, but it'd be too obvious.
- KWC
Analysis
Finds Little Gain in Tax-Cut Plan
2 Economists Assess Dividend Proposal
By
John M. Berry, Washington Post Staff Writer, Monday, January 6,
2003
Eliminating
taxes on dividends paid to individuals, the centerpiece of President Bush's
stimulus package, would do little to spur economic growth or reduce the
nation's jobless rate, according to an analysis this weekend by two
prominent economists. Bush is
to provide details of his plan in a speech tomorrow.
Allen
Sinai of Decision Economics
and Andrew
F. Brimmer,
a former Federal
Reserve Board member
who heads a consulting firm, said that even a much broader combination of
additional spending measures and tax cuts worth nearly $500 billion over the
next five years would raise growth by only about a half-percentage point and
reduce the unemployment rate by only one-tenth or two-tenths of a percentage
point this year and next.
The
impact of a stimulus package much larger than the one the administration is
expected to propose is so small, Sinai told a panel session at the annual
meeting of the American
Economics Association
here, because "the
economy is so large" relative to the amount of stimulus.
http://www.washingtonpost.com/wp-dyn/articles/A14740-2003Jan5.html
The perils of short-term tax cuts
By Gene Sperling in The Financial Times
of London, Published: January 5 2003
22:08
Although
John
Maynard Keynes
dubbed the "long term" as the time when we are all dead, it is the precisely
the time-frame on which countries should focus when pursuing policies of
fiscal discipline. Unfortunately, honest debate about rising deficits and
fiscal discipline in the US is being hampered by those who consistently blur
the distinction between the short term and the long
term.
There are three critical distortions in
the case now being made by Republicans for further tax cuts. First, the case
for a short-term stimulus is being used as a rationale for giving up on
long-term fiscal sanity. Basic Keynesian economic
theory dictates that, in a slow
economy, it makes sense to use temporary tax cuts or spending increases to
boost spending. So when policymakers say we should not worry about a
temporary rise in the deficit in a time of economic weakness or war they are
right. But the crucial words are "temporary" and
"time of economic weakness
or war".
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1039524179720&p=1012571727092
WP
Editorial: The Tax Cut Trap
Monday,
January 6, 2003 @
http://www.washingtonpost.com/wp-dyn/articles/A15014-2003Jan5.html
LET'S
SEE IF we have this right. President Bush plans to propose a stimulus plan
the centerpiece of which will have little or no stimulative effect. At a time when some people badly
could use help, Mr. Bush's tax cut mostly will help those who need it
least. And while the president
is warning Congress to restrain its spending on basics such as education and
aid to the poor, the tax cuts will further inflate his growing budget
deficit. No wonder that Mr.
Bush, even before officially unveiling the plan tomorrow, waved his magic
"class warfare" amulet, seeking to obscure the obvious -- another tax cut
for the rich -- by preemptively accusing his
accusers.
Outgoing mail scanned by NAV
2002
