Tax Cuts: As Bad At The Margin As Spending

Quoth Richard Lowry, at the Corner, on the Obama Administration's priorities:

"It's as if FDR skipped the bank holiday and focused first on passing the CCC. . . . if I were Eric Cantor or John Boehner, I'd be talking about a "real recovery package" every day— payroll and corporate tax cuts, regulatory reforms for the financial and auto industries, relief for small business. "

Do conservatives favor tax cuts at _every_ margin?

If Obama is neglecting the financial system, the Congressional Republicans should be talking about it every day, never mind the tax cuts.

But they should go further. They should study and discuss the roots of the situation, and address those with their proposals. I think they'll find asset prices are collapsed by a reduction in credit for over-leveraged levels. That leverage isn't (shouldn't) return, those assets prices aren't returning, and the reversal of wealth-effect consumption will be long term. Tax cuts won't increase perceived wealth enough to overcome the perceived losses from asset price falls, especially since recipients would would anticipate higher future taxes to pay for them. The cuts would help households reduce their debt, but that would be offset by the increase in federal debt.

If they've got a better explanation of the problem, let's hear it. If they don't understand the problem, let's hear _that_ -- and when Obama et al respond with mockery, force _them_ to give _their_ explanations. I promise you, those won't make any sense at all. No one in Washington sounds like they understand the problem. They're all pretending they do, because they're supposed to, but they don't. And if everyone is just guessing anyway, "try something" sounds pretty good, and "help people at the same time" sounds good too. Confusion aids the side with the better soundbites -- and "health care for kids!" will beat "incentive for entrepreneurs!" every time.

Let's stop hearing about how complicated all this is, and start hearing people pick it apart.

If the GOP and the conservatives don't start to talk like grownups, no one will.