The Expectational Phillips Curve Is Highly Nonlinear When Inflation Is Low

Obama as Bad Negotiator, Part CLXIV: Long-Term Budget Watch

Matthew Yglesias:

Baseline Games | ThinkProgress: Under current law, the Bush tax cuts will expire. They will expire unless a majority of House members and 60 senators and the president of the United States agree to extend them. Consequently, either 41 Democratic senators or else President Obama plus 34 Democratic senators or else President Obama plus 146 Democratic House members can ensure a large increase in federal revenue. There is absolutely no need to get even a single Republican to assent to this plan.

Absolutely everything you’ve heard over the past year or month or week about various “bargains” or deals flows from the fact that Democrats have taken this idea off the table…. This creates a crippling bargaining weakness for the Democrats. The Republican negotiating objective is low taxes, but the Democratic negotiating objective is bipartisan agreement….

[P]rogressives need to think… harder about… the toxic impact of the Democrats rallying in 2008 around the cry of absolutely no tax increases of any kind for the non-rich…. [P]ushing for rich-people-only tax increases has proven to be a good applause line… [and has] made actual governance incredibly difficult.

As I have said many times, the right policy and political strategy is simply to let the Bush tax cuts expire--and then propose a set of Obama tax cuts once the Bush tax cuts have expired.

That is the kind of thing that it is trivially easy to do via Reconciliation in 2009-2010

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