Will Wilkinson tries to understand the current liberal mindset over the Obama tax deal:
Given the economic implications of the two scenarios – the first in which the tax deal goes through and billions of dollars are pumped into a faltering economy; the second in which all the Bush tax cuts expire, sending shockwaves through the economy and providing no stimulus whatsoever – it’s hard for me to understand why Democrats would be so up in arms over Obama’s deal. It can’t be about deficits – liberals have been driving home the fact that deficits don’t matter during a recession. It must be more of a visceral, gut-level thing. Strong dislike for the rich and the perception of favoritism for the rich under conservative regimes.
And they may have a point! I’m not quite sure. What I do know is that the House today voted to scuttle the deal due to their ‘tremendous concerns’ over the whole thing. I also know that this is ironic especially in light of Paul Krugman’s better-late-than-never support for the deal. Then again, I agree that Obama would have been wiser, politically, to get two years on everything: tax cuts, unemployment benefits extension, payroll tax cuts (and he should have gotten both employees and employers off the hook to spur job growth!). If you’re going to make a deal there’s no reason to have different time lines for the various components of the deal.
But he didn’t, and now we have what we have and it’s better than nothing for all sides concerned. The tax cuts will provide stimulus to an ailing economy, and prevent the contraction higher taxes would inevitably lead to if all the cuts were to expire.
If the Democrats kill the deal they will almost certainly be blamed for any economic downturn that follows. Obama will likley not win re-election (barring some miraculous turn of events) and the Democrats will take another trouncing in the House and Senate. If Democrats were better at messaging, perhaps they could have spun this on the Republicans – but they’re not. So take the deal. The lesser of two evils in this case is actually quite a lot less evil than the economic and political ramifications of letting the cuts expire.
