Liveblogging World War II: January 2, 1943
"Fiscal Cliff" Deal Does Very Little

The Obama Tax Cuts: Now It Is Time to Think About Funding Them…

Joe Weisenthal:

[I]ncome taxes are lower for everyone today than they would have been if the American Taxpayer Relief Act hadn't gone into effect. While top marginal rates are rising for those making over $400K, those earners still get a cut on their income up to $400K.

The difference between the [2013] Obama Tax Cuts and the [2001] Bush Tax Cuts? Obama's are permanent.

And now on to our big long-run problem:

Unfunded tax cuts are, in the long run, bad juju. We cannot make policy on the expectation that the U.S. will always be able to borrow at negative real interest rates. And we should make policy aiming for a low debt-to-GDP ratio, because emergencies will arise in which we will want to boost federal spending quickly and substantially to attain important national purposes.

Obama needs a policy to fund these tax cuts--not in the short-term or (probably) in the medium-term but in the long run. What is that policy going to be? Carbon tax? Include health and other benefits in the tax base? Cut defense spending? Lower the top bracket amount down to $100K?

Inquiring minds would like to know...