Lame Ducks Up To No Good

Just after the Nov election we highlighted a caveat to our otherwise constructive view. We might have listed this very same item as a wild card. That would be the odds that lame duck “progressives,” still welded to their twisted ideology despite, to borrow a phrase from Irving Kristol, having been “mugged by reality” will do significant harm to their Country, and simply out of spite.

We are referring of course to the left’s insistence that the rich pay up. Why the jealousy, who knows, but it can be nothing else but envy as all but the most economically illiterate now understand that tax cuts fire growth. They are in everyone’s best interest. So what if a guy making $500M gets to keep a little more. All the more likely he will plant a new garden, or maybe buy a vacation home and in so doing enrich others (nurserymen, realtors to name two of these).

From Paul Bedard of US News, “Failure by Congress to extend the Bush tax cuts, especially locking in the 15 percent capital gains tax rate, will spark a stock market sell off starting December 15 as investors move to lock in gains at a lower rate than the 20 percent it would jump to next year, warn analysts. . . .While it is unclear how bad the sell off could be, it could wipe out the year's gains......”

Not really. There will be no Dec/15 massacre as the market’s take on the odds of the lame duck tax event are already being priced in.

But there’s still no excuse for the Dem’s sordid behavior.

Pelosi and fellow partisans (not retards as they know exactly what they are up to) continue to pimp two falsehoods, the first that gov’t spending counts for something aside from union payoffs, and the second that tax cuts “must be paid for.” They’re not fools. They’re traitors.

From Michael Boskin, econ prof at Stanford, “My colleagues John Cogan and John Taylor, with Volker Wieland and Tobias Cwik, demonstrate that government purchases have a GDP impact far smaller in New Keynesian than Old Keynesian models and quickly crowd out the private sector. They estimate the effect of the February 2009 stimulus at a puny 0.2% of GDP by now. By contrast, the last two major tax cuts—President Reagan's in 1981-83 and President George W. Bush's in 2003—boosted growth. They lowered marginal tax rates and were longer lasting, both keys to success. In a survey of fiscal policy changes in the OECD over the past four decades, Harvard's Albert Alesina and Silvia Ardagna conclude that tax cuts have been far more likely to increase growth than has more spending.”

Robert Craven