Recessions are for the little people. So is deficit reduction.

Recessions Are For The Little People

by digby

Honestly, I just have to laugh:

Before August, Democrats generally were united in opposing any extension for the top rates and looked forward to a pre-election battle with Republicans. The chief debate has been over whether to make the middle-class tax rates permanent or to extend them for a year given the revenue loss of about $3 trillion over a decade.

Now Democrats are weighing whether they may have to accept a one-year extension of the tax rates for the wealthy. More Democratic lawmakers now fear attacks from Republicans, who argue that no one should pay higher taxes, certainly not before the economy recovers fully.

Right. This recession has hit everyone hard and you can't raise taxes during a recession. Of course, some people aren't actually in a recession:

In 2008, as the financial crisis raged, the stock market hit bottom and the Great Recession ate into the economy, the number of millionaires in the United States plunged.

But last year the number of millionaires bounced up sharply, new data show.

And after that decline and rebound, the millionaire class held a larger percentage of the country's wealth than it did in 2007.

"It's been a recession where everyone took a hit — with the bottom taking a bigger hit," said Timothy Smeeding, a University of Wisconsin professor who studies economic inequality. But "the wealthy alone have bounced back."


The consulting firm's latest report on wealth, one of the first broad depictions of how wealth shifted in 2009, indicates that the number of U.S. households with at least $1 million in "bankable" assets climbed 15% last year to 4.7 million after tumbling 21% in 2008.

"Assets have recovered much faster than we expected, to be candid," said Monish Kumar, a managing director at Boston Consulting Group.

Yes. You can see why we wouldn't want to ask these unlucky duckies to pay what they paid under Bill Clinton in order to help fund some additional stimulus to put the rest of America back to work. They are, after all, the productive members of society and shouldn't be penalized for all their hard work (sending emails to their brokers.)

I don't know why Democrats can't make a patriotic argument for taxing these people --- they are benefiting while the rest of the country continues to struggle. But I know for a fact that they are persuading themselves that they will lose elections on the issue so they shouldn't even try --- Americans have been convinced that all taxes are evil and so it shall ever be. In other words, there's no point in ever even trying to change people's attitudes about anything. (That works out very well for the party that spends vast resources propagandizing the public. For the one that doesn't --- not so much.)

I would guess that allowing the Bush tax cuts for the wealthy to expire is off the table for the foreseeable future --- the heavy lifting's not going to get any easier a year from now when we are in the midst of a brutal presidential campaign. And deficit hysteria hasn't even reached fever pitch yet. We might as well get used to the idea now. Nah guh happen.

* I should point out that there are quite a few, not all, who are just pimping themselves out for big donor dollars and others who are brainwashed by Randian bullshit and actually believe that the wealthy will start clipping coupons if they have to go back to the 90s era tax rates. It isn't all strategery or cowardice. There are as many reasons for capitulation to the Republicans are there are brands of catfood.

Update: This post by Ezra Klein observes that inequality has made a huge comeback too, unsurprisingly.