"Democrats are compromising between a Republican economic model and an even worse Republican model"

Better Believe It

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Sun Mar-06-11 11:26 PM
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"Democrats are compromising between a Republican economic model and an even worse Republican model"

Edited on Sun Mar-06-11 11:35 PM by Better Believe It

Democrats Are Ceding the Entire Traditional Democratic Economic Ideology
by Laurence Lewis
March 6, 2011

The problem is that, on economic issues, DC Democrats have forgotten how to be Democrats. By making the Bush tax cuts their own, they have removed even from discussion the most obvious means of addressing any fiscal issues. And it isn't confined to the White House. Congressional Democrats are playing along by accepting those short-term budget cuts for a mere delay in the shutdown showdown, signaling as the White House already did with the tax cuts that the Republicans can get their way by playing hardball. But is it really only the Republicans' way? That's the question. And while some Democratic governors are attempting a more responsible approach, their efforts are being hampered by those Obama tax cuts:

Those Democratic governors deserve a lot of credit, because the politics of supporting responsible tax increases is not easy when a Democratic White House and its Congressional allies have removed tax increases from the federal conversation and are actually doing the exact opposite by promoting tax cuts at the same time they're ostensibly concerned about deficits. Tax cuts that are making the jobs of those Democratic governors even more difficult.

Whatever the budget resolution ends up being, you can be certain that it will be sold as a compromise. But it won't be a compromise. As it so often does, the administration ceded the paradigm from the start. A real compromise would include what now isn't even being discussed. A real compromise would begin by asking what the American people need, and how we are going to pay for it. Instead, the only debate will be about the depth and specifics of the inevitable cuts. And we likely will hear much about shared sacrifice from people who themselves will be sacrificing nothing. The Democrats are now playing on the Republicans' field. They are compromising between what had been a Republican economic model and an even worse Republican economic model.

It's bad enough that on economic matters the Democrats won't stand up for the values and models that once defined the party and by which this nation thrived for more than half a century, but they're now actually doing the Republicans' work for them. This enables the Republicans to continue moving even more to the extreme right, with the once fringe Koch model of anarcho-libertarianism now going maintream. The Democrats still control the White House and the Senate, but they have abdicated economic leadership and ceded not just a few issues but what had been their economic ideology. Keynesianism is, at best, dormant. For all the good the Democrats are doing for it, it may as well be dead. Austerity is now the norm. For the Democrats. As the economy continues to stagger, tens of millions of well-meaning Americans continue to suffer, and neither help nor an end is in sight. Grover Norquist must be pleased. Democrats are starving the government of funding, and Democrats are trending toward cutting it down to the size where it can be drowned in a bathtub.

Read the full article at:

http://www.dailykos.com/story/2011/03/06/952834/-DC-Democrats-are-ceding-the-entire-traditional-Democratic-economic-ideology

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A Tax Cut May Carve Into the Budgets of 19 States
By MICHAEL COOPER
March 1, 2011

Struggling states could lose as much as $5.3 billion in tax collections during the next few years in an unintended consequence of one of the lower-profile federal tax cuts that President Obama signed in December, according to a report released Tuesday.

The tax-cut package the president signed in December is best known for extending the Bush-era tax rates for two years and giving a one-year payroll tax cut to most Americans. But it included a business tax cut that could blow a hole in state budgets: a provision allowing businesses to deduct the full value of new equipment purchases from their taxes through 2011.

That cut, intended to spur the economy by encouraging businesses to spend more money on equipment, could end up costing 19 states as much as $5.3 billion in lost revenue over the next few years, according to the report, by the Center on Budget and Policy Priorities, a research organization based in Washington.

The 19 states stand to lose money because they link their state tax laws to federal tax law. So the newly allowed federal tax deductions that businesses in those states take will lower their taxable incomes, which would in turn have the effect of driving down state corporate and income tax collections.

http://www.nytimes.com/2011/03/02/us/politics/02taxes.html?_r=1&hp