“Let’s See What Sticks”: Orszag Calls For Tax Cuts (Sort Of), Obama Wants To Spend, Spend, Spend

David Horowitz's NewsReal Blog ^ | Chris Queen

[Michael van der Galien]

President Obama’s former director of the Office of Management and Budget, Peter Orszag, has reared his head again, this time writing his first column for the New York Times. In his September 7 column, Orszag appears to take a surprising position, at least for an economist on the Left, as he argues in favor of extending the Bush tax cuts for two years.

Contrasting Orszag’s ideas in his column with President Obama’s proposal yesterday for another $50 billion spending program, complete with a federally run “infrastructure bank,” it’s clear that the Obama administration and its satellites are still clueless on how to fix the economy. They are engaged in a continual game of “see what sticks” when it comes to righting the failing American economy.

Orszag argues for an extension of the Bush tax cuts – albeit a temporary one, until 2013, when they would run out permanently. On the surface, Orszag’s argument seems to make a little sense:

[N]o one wants to make an already stagnating jobs market worse over the next year or two, which is exactly what would happen if the cuts expire as planned.

Higher taxes now would crimp consumer spending, further depressing the already inadequate demand for what firms are capable of producing at full tilt.

Orszag goes on to state that extending the tax cuts permanently would raise the budget deficit by $3 trillion dollars over the next decade and that the deficit will most likely account for 4 to 5 percent of GDP by 2015. Instead of advocating cuts in spending (except, he hints, for defense spending) he notes that “additional revenue…will be necessary to reduce the deficit to sustainable levels.”

[domenad]

Unfortunately the dems arent’ dumb enough to fall for this one, because it would be much too easy to run in 2012 on Obama letting taxes go up when the 2 year extension runs out. “We Guarantee, vote Obama, get higher taxes.”

[domenad]

Unfortunately the dems arent’ dumb enough to fall for this one, because it would be much too easy to run in 2012 on Obama letting taxes go up when the 2 year extension runs out. “We Guarantee, vote Obama, get higher taxes.”

[humblegunner]

(Excerpt)

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[Brookhaven]

Orszag goes on to state that extending the tax cuts permanently would raise the budget deficit by $3 trillion dollars over the next decade...

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Proof that the administration is full of economic idiots.

The 3 trillion dollar number is based on the economy staying at the current level, but just before this they said raising the tax level would damage the economy causing it to shrink. Which means the new taxes wouldn’t collect anywhere near 3 trillion dollars (in fact, they might result in a net lowering of total tax revenues).

To put it more simply, which number is bigger:

a: A 50% tax on a 1 million dollar economic pie.

b: A 45% tax on a 1.2 million dollar economic pie.

The answer is the later. The 45% tax rate produces $540,000 of revenue. This is the paradox liberals just can’t comprehend. Raising taxes slows down the economy, shrinks the economic pie, and actually causes you to collect LESS in total tax revenue.