Yet, that seems to be the Democratic plan.
The only sound idea is coming from Lawrence O’Donnell. From “Meet the Press” yesterday:
MR. O’DONNELL: They are. It looks like they’re going to avoid this Friday’s possible shutdown and, and have a two week extension. They seem to have agreed on that by John Boehner basically taking the cuts the president has identified in the future and saying, “Let’s start doing them now.” That, that’s the cut package that they will include in their ongoing resolution. But the problem with this dialogue is, it all begins after our failure on recognizing what the top tax rate burdens should really be. And, and keeping them down has created this much more serious deficit situation going forward. We’ve been ignoring for years the reality of what has happened in the super rich level of income in this country. We should have several higher top tax brackets. It shouldn’t stop at a couple of hundred thousand dollars. We have incomes, we have short-stops making $15 million who are paying the same tax rate as, you know, two UCLA married professors. This is outrageous. We have people on Wall Street in deals making $300 million in a day and they pay that same top tax rate as people making a couple of hundred thousand dollars. And so we’re ignoring this massive revenue possibility in the high end of incomes in this country.
Tax cuts don’t create jobs. They made matters worse, especially if you’re looking at the deficit. If tax cuts worked we wouldn’t be in this mess, but it’s the only things both parties know how to do.
The latest news, however, is even worse for Republicans. Their fiscal fantasy would actually make things worse. From Politico:
Moody’s chief economist, Mark Zandi, projected that the House proposal would cut real GDP growth by 0.5 percent in 2011 and 0.2 percent in 2012. That, in turn, would lead to 400,000 fewer jobs being created than expected by the end of this year and a total of 700,000 fewer jobs by the end of 2012.
“While long-term government spending restraint is vital, and laying out a credible path toward that restraint very desirable, too much cutting too soon would be counterproductive,” Zandi wrote. The economy is adding from 100,000 to 150,000 jobs each month, he said, but until that number reaches about 200,000 on a monthly basis, “[i]mposing additional government spending cuts before this has happened, as House Republicans want, would be taking an unnecessary chance with the recovery.”
A Goldman Sachs analysis released last Wednesday also concluded that Republicans’ 2011 cuts would be detrimental to the economic recovery.
This doesn’t matter to Democrats, who are still giving Republicans a path to win the austerity contest, instead of demanding some smart tax shifting and raising for the very wealthiest Americans.