Reply #6: Dean Baker: The Payroll Tax Cut: A Stimulus That Progressives Should Oppose [View All]

[brentspeak]

Baker corrects the NYT's article merely for the sake of accuracy, but don't take that as an endorsement of the payroll tax cut.

http://yubanet.com/opinions/Dean-Baker-The-Payroll-Tax-Cut-A-Stimulus-That-Progressives-Should-Oppose.php

The Payroll Tax Cut: A Stimulus That Progressives Should Oppose

By: Dean Baker, Center for Economic and Policy Research (CEPR)

July 25, 2011 - President Obama is proud of the fact that he was willing to bargain away the core of the country's social safety net to reach an agreement with the Republicans on the debt ceiling. According to accounts of the negotiations, he had agreed to raise the eligibility age for Medicare to 67. He had also agreed to a change in the cost-of-living adjustment formula for Social Security that would reduce benefits by an average of more than 3 percent. This is in addition to the cuts in Medicaid and other programs that would also have been part of the deal.

Fortunately the Republicans walked away because of the tax increases in the deal. This is not the first time that the Republicans may have inadvertently saved Social Security. Their impeachment of President Clinton put an end to any plans that he had for privatizing the program.

However, we cannot count on Republican intransigence to always come to the rescue of Social Security. We know that we have a president in the White House who is perfectly willing to bargain away the program if the occasion arises.

snip

The economy desperately needs stimulus and we should find every possible way to boost employment. It is not fair that millions of workers are unemployed or underemployed because of the incompetence of people who make economic policy. But risking the future of Social Security to temporarily bring about a modest reduction in the unemployment rate is not good policy.