Stinky deal not so stinky after all?
I have to admit, that from a political perspective, this deal is a real stinker. There are a lot of awful, unfair and demoralizing pieces to this deal. Thinking about it from another direction, thinking of it as another stimulus, makes it a lot more attractive of a package and really clarifies where Obama was coming from in accepting this compromise. I don't think he's going to sell it that way until all the votes have been cast and that's a shame, because there are a lot of Democrats out there who are absolutely bewildered and dismayed by this deal. My problem really is that I don't have faith that the Democrats will be able to let the tax levels revert in 2012, especially when it will be so easy for the Republicans to create the narrative that the Democrats are going to raise your taxes.
A senior administration official says the result is even more stimulus for the economy than Mr Obama had planned in last February’s budget. Fiscal policy goes from being a source of drag on the economy to a source of stimulus next year, he figures. “This is a much better deal for the near term economy than what we put in the budget, and what passed the House last week. The combination of unemployment insurance, business expensing, the payroll tax holiday and [refundable tax credits] is very high impact.”
While the stimulative boost is probably worth some $800 billion, or roughly 5% of GDP, the 10-year cost is lower largely because tax deferred by accelerated business investment expensing will eventually be paid.
Fiscal policy: Austerity delayed | The Economist
A senior administration official says the result is even more stimulus for the economy than Mr Obama had planned in last February’s budget. Fiscal policy goes from being a source of drag on the economy to a source of stimulus next year, he figures. “This is a much better deal for the near term economy than what we put in the budget, and what passed the House last week. The combination of unemployment insurance, business expensing, the payroll tax holiday and [refundable tax credits] is very high impact.”
While the stimulative boost is probably worth some $800 billion, or roughly 5% of GDP, the 10-year cost is lower largely because tax deferred by accelerated business investment expensing will eventually be paid.
Fiscal policy: Austerity delayed | The Economist