HOME



Digby's Hullabaloo
2801 Ocean Park Blvd.
Box 157
Santa Monica, Ca 90405



Twitter:
@digby56
@DavidOAtkins

emails:
Digby:
digbysez at gmail
David:
isnospoon at gmail
Dennis:
satniteflix at gmail








Infomania

Salon
Buzzflash
Mother Jones
Raw Story
Huffington Post
Slate
Crooks and Liars
American Prospect
New Republic
Common Dreams
AmericanPoliticsJournal
Smirking Chimp
CJR Daily
consortium news

Blog-o-rama

Eschaton
BagNewsNotes
Daily Kos
Political Animal
Driftglass
Firedoglake
Taylor Marsh
Spocko's Brain
Talk Left
Suburban Guerrilla
Scoobie Davis
Echidne
Electrolite
Americablog
Tom Tomorrow
Left Coaster
Angry Bear
oilprice.com
Seeing the Forest
Cathie From Canada
Frontier River Guides
Brad DeLong
The Sideshow
Liberal Oasis
BartCop
Juan Cole
Rising Hegemon
alicublog
Unqualified Offerings
Alas, A Blog
RogerAiles
Lean Left
Oliver Willis
skippy the bush kangaroo
uggabugga
Crooked Timber
discourse.net
Amygdala
the talking dog
David E's Fablog
The Agonist


Saturday Night at the Movies by Dennis Hartley review archive

01/01/2003 - 02/01/2003 02/01/2003 - 03/01/2003 03/01/2003 - 04/01/2003 04/01/2003 - 05/01/2003 05/01/2003 - 06/01/2003 06/01/2003 - 07/01/2003 07/01/2003 - 08/01/2003 08/01/2003 - 09/01/2003 09/01/2003 - 10/01/2003 10/01/2003 - 11/01/2003 11/01/2003 - 12/01/2003 12/01/2003 - 01/01/2004 01/01/2004 - 02/01/2004 02/01/2004 - 03/01/2004 03/01/2004 - 04/01/2004 04/01/2004 - 05/01/2004 05/01/2004 - 06/01/2004 06/01/2004 - 07/01/2004 07/01/2004 - 08/01/2004 08/01/2004 - 09/01/2004 09/01/2004 - 10/01/2004 10/01/2004 - 11/01/2004 11/01/2004 - 12/01/2004 12/01/2004 - 01/01/2005 01/01/2005 - 02/01/2005 02/01/2005 - 03/01/2005 03/01/2005 - 04/01/2005 04/01/2005 - 05/01/2005 05/01/2005 - 06/01/2005 06/01/2005 - 07/01/2005 07/01/2005 - 08/01/2005 08/01/2005 - 09/01/2005 09/01/2005 - 10/01/2005 10/01/2005 - 11/01/2005 11/01/2005 - 12/01/2005 12/01/2005 - 01/01/2006 01/01/2006 - 02/01/2006 02/01/2006 - 03/01/2006 03/01/2006 - 04/01/2006 04/01/2006 - 05/01/2006 05/01/2006 - 06/01/2006 06/01/2006 - 07/01/2006 07/01/2006 - 08/01/2006 08/01/2006 - 09/01/2006 09/01/2006 - 10/01/2006 10/01/2006 - 11/01/2006 11/01/2006 - 12/01/2006 12/01/2006 - 01/01/2007 01/01/2007 - 02/01/2007 02/01/2007 - 03/01/2007 03/01/2007 - 04/01/2007 04/01/2007 - 05/01/2007 05/01/2007 - 06/01/2007 06/01/2007 - 07/01/2007 07/01/2007 - 08/01/2007 08/01/2007 - 09/01/2007 09/01/2007 - 10/01/2007 10/01/2007 - 11/01/2007 11/01/2007 - 12/01/2007 12/01/2007 - 01/01/2008 01/01/2008 - 02/01/2008 02/01/2008 - 03/01/2008 03/01/2008 - 04/01/2008 04/01/2008 - 05/01/2008 05/01/2008 - 06/01/2008 06/01/2008 - 07/01/2008 07/01/2008 - 08/01/2008 08/01/2008 - 09/01/2008 09/01/2008 - 10/01/2008 10/01/2008 - 11/01/2008 11/01/2008 - 12/01/2008 12/01/2008 - 01/01/2009 01/01/2009 - 02/01/2009 02/01/2009 - 03/01/2009 03/01/2009 - 04/01/2009 04/01/2009 - 05/01/2009 05/01/2009 - 06/01/2009 06/01/2009 - 07/01/2009 07/01/2009 - 08/01/2009 08/01/2009 - 09/01/2009 09/01/2009 - 10/01/2009 10/01/2009 - 11/01/2009 11/01/2009 - 12/01/2009 12/01/2009 - 01/01/2010 01/01/2010 - 02/01/2010 02/01/2010 - 03/01/2010 03/01/2010 - 04/01/2010 04/01/2010 - 05/01/2010 05/01/2010 - 06/01/2010 06/01/2010 - 07/01/2010 07/01/2010 - 08/01/2010 08/01/2010 - 09/01/2010 09/01/2010 - 10/01/2010 10/01/2010 - 11/01/2010 11/01/2010 - 12/01/2010 12/01/2010 - 01/01/2011 01/01/2011 - 02/01/2011 02/01/2011 - 03/01/2011 03/01/2011 - 04/01/2011 04/01/2011 - 05/01/2011 05/01/2011 - 06/01/2011 06/01/2011 - 07/01/2011 07/01/2011 - 08/01/2011 08/01/2011 - 09/01/2011 09/01/2011 - 10/01/2011 10/01/2011 - 11/01/2011 11/01/2011 - 12/01/2011 12/01/2011 - 01/01/2012 01/01/2012 - 02/01/2012 02/01/2012 - 03/01/2012 03/01/2012 - 04/01/2012 04/01/2012 - 05/01/2012 05/01/2012 - 06/01/2012 06/01/2012 - 07/01/2012 07/01/2012 - 08/01/2012 08/01/2012 - 09/01/2012 09/01/2012 - 10/01/2012 10/01/2012 - 11/01/2012 11/01/2012 - 12/01/2012 12/01/2012 - 01/01/2013 01/01/2013 - 02/01/2013 02/01/2013 - 03/01/2013 03/01/2013 - 04/01/2013 04/01/2013 - 05/01/2013 05/01/2013 - 06/01/2013 06/01/2013 - 07/01/2013 07/01/2013 - 08/01/2013 08/01/2013 - 09/01/2013 09/01/2013 - 10/01/2013 10/01/2013 - 11/01/2013 11/01/2013 - 12/01/2013 12/01/2013 - 01/01/2014 01/01/2014 - 02/01/2014 02/01/2014 - 03/01/2014 03/01/2014 - 04/01/2014 04/01/2014 - 05/01/2014 05/01/2014 - 06/01/2014 06/01/2014 - 07/01/2014 07/01/2014 - 08/01/2014 08/01/2014 - 09/01/2014 09/01/2014 - 10/01/2014 10/01/2014 - 11/01/2014


 

This page is powered by Blogger. Isn't yours?

Hullabaloo


Tuesday, October 23, 2012

 
Credibility wetdreams

by digby


You have to love this from Joe Nocera in the New York Times:

Judging by the first two presidential debates — I’m writing this on the eve of the third — there is one area where Mitt Romney and President Obama are in at least quasi agreement: the need for serious tax reform.

“I want to bring the rates down; I want to simplify the tax code; and I want to get middle-income taxpayers to have lower taxes,” said the Republican challenger during the second debate. He added that he would limit “deductions and exemptions and credits, particularly for people at the high end” — while getting us “on track for a balanced budget.”

In response, President Obama said that he, too, wanted to bring rates down for the middle class. But, he said, “in addition to some tough spending cuts, we’ve also got to make sure that the wealthy do a little bit more.”
[...]
[T]he need for tax reform is probably more urgent now than it was in the 1980s. Then, the deficit wasn’t nearly the problem that it is today. Now, tax reform is just about the only politically palatable way for Congress to begin the process of lowering the deficit.

Assuming that the deficit is the primary problem here, does it really make sense to "bring rates down" and lower corporate taxes? Sure, closing loopholes makes sense and "asking the wealthy to pay a little bit more" is a good idea, but really, if the deficit is so goddamned important, why do they insist that we must lower rates at the same time? It makes no sense.

Well, guess what? There is a reason and it's as stupid as the myth of the confidence fairy and the bond vigilantes. We'll call it the credibility wet dream:

Lowering tax rates will give Congress and the president — whomever he turns out to be — cover for broadening the tax base, reforming entitlement spending and raising additional revenue.

In order to close the deficit they must cut be allowed to cut taxes so that they will have the credibility to raise taxes. That is what they are saying.

Now Chuck Shumer has thrown an interesting monkey wrench into this debate by saying that we shouldn't lower the tax rates. But I trust Chuck "Wall Street" Shumer as much as I trust the confidence fairy on this stuff. Ezra Klein interviewed him a few weeks ago and he said all the right things on the tax rates. But he also said this:

EK: I want to go back to something you said a moment ago: that our two biggest problems are median wages and deficits. I know a lot of folks who would say our two biggest problems are jobs and jobs. And as for deficits, real interest rates are negative. The market is begging us to take their money. This focus on deficits, these folks argue, is hugely damaging. We need to be spending our time and political will on jobs.

CS: Here’s what I tell my more liberal colleagues: We’re like a blindfolded man walking towards a cliff. If we keep walking in that direction, we’ll fall off, like other countries have fallen off. You can argue whether we’re 500 yards or 5,000 yards from the cliff, but it’s unsustainable. And it also gets away from helping the middle class, as the deficits mean we don’t have the money to pay for some of the things like education and scientific research that expand middle-class incomes.

So I don’t agree. I don’t think the deficit is our only problem. But it’s number two, and it’s real.

I'm hoping that he is trying to decouple "tax reform" from the fiscal cliff negotiations. And certainly, if he manages to convince even one Villager that "tax reform" doesn't mean lowering rates so we can raise rates, he will have done us all a solid. But in the end, I have a feeling that this notion of lowering rates in order to buy the goodwill they need to raise rates is not going to be so easily dismissed.

And recall that in the summer of 2011 when Boehner were within an inch of a Grand Bargain that cut all the social programs, tax reform wasn't in the mix. They don't need it to do a very bad deal.

Here's what Chuck has in mind in the short term:

EK: But more specifically on process. You guys won’t be able to get everything done in the lame-duck. So how do you build the tax reform process, however it ends up working, in such a way that you can trust it?

CS: The more detail the better. You can’t just say we’ll raise this amount of revenues and keep distribution the same. You need some real detail here. You need to lock in what the rates will be. If you need $1.5 to $1.8 trillion in revenues, you can gain about a trillion dollars from raising the top rate and having the estate tax go up, and you’ll be able to find another $500 billion on the expenditure side That you could get from high-income people. So we need that level of detail. You can’t fudge it.

Just a reminder: this is a negotiation. And that means Shumer is making his demands, very likely with the knowledge that he won't get what he wants. So the question isn't whether this is a reasonable ask, but what it is he's really after. I don't know the answer to that, but I do know that the target they've all arbitrarily agreed upon initially is 4 trillion.

Nocera outlines all the reasons why nothing has really changed and the resulting high probability of a train wreck in the lame duck session. But he still hopes for the best:

Right around the corner lies the “fiscal cliff.” It offers Congress and the president a golden opportunity to begin a process that will lead to tax reform and, ultimately, deficit reduction.

I keep hearing a lot about "beginning the process that will lead to ...." so I'm getting the feeling that we're going to see another reset. Which is better than a Grand Bargain any day.


.

Search Digby!