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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (40491)	1/27/2010 9:23:45 AM
From: Peter Dierks	2 Recommendations Read Replies (1) \| Respond to of 71588

Democratic Tax Dissent Not everyone wants the Bush tax rates to expire. JANUARY 27, 2010. In Democratic Washington, it's supposed to be an article of faith that the Bush tax cuts "on the rich" were a disaster and must be allowed to expire at the end of this year. However, that means socking the economy with a record tax hike next January 1, and some Democrats are beginning to have second thoughts. Harry Mitchell, a second-term Congressman from Arizona, wrote President Obama last week to urge him to extend the 15% tax rate on capital gains and dividends that will revert to 20% and 39.6%, respectively, next year. He also doesn't want the 55% confiscatory rate on estates restored, as it also would be in 2011. "Given the unique economic difficulties we face as a nation, this is the wrong time to raise these taxes. We need to retain these tax cuts that encourage investment that stimulates growth and job creation," Mr. Mitchell wrote. Those sensible words are echoed by Gerry Connolly of Virginia, who told Dow Jones Newswires that "I think there is a certain logic to leaving well-enough alone for now, given the fragility of the economic recovery," adding that "it's a question of prudent judgment and timing." That timing also includes November Congressional elections which may be contested amid a very high national jobless rate, if not still 10%. Republicans are certain to tell voters the unfortunate truth that Democrats are determined to raise their taxes, despite what has so far been a less than roaring recovery. You don't have to be a supply-sider to wonder about the wisdom of raising taxes amid a fragile economy, and once upon a time even Keynesians favored tax cuts as economic stimulus. Walter Heller helped to write JFK's tax cuts, and current White House chief economist Christina Romer has done economic research showing the superiority of tax cutting over spending as fiscal stimulus. That was before she sat in the White House mess. Alas, these continue to be voices in the Democratic wilderness, and Secretary Tim Geithner recently squashed any suggestion that all of the Bush tax rates could be saved. Voters certainly deserve a good tax debate this fall. online.wsj.com

To: TimF who wrote (40491)	9/21/2010 9:52:12 AM
From: Peter Dierks	1 Recommendation Read Replies (1) \| Respond to of 71588

A Tale of Two Recoveries The state of the economy after a year of 'rebound.' SEPTEMBER 21, 2010. It's official: The Great Recession ended 15 months ago, in June 2009. That was the word Monday from the economists at the National Bureau of Economic Research, the outfit that tracks the U.S. business cycle based on a variety of economic variables. By their calculations, the downturn that began in December 2007 lasted 18 months, or the longest on record since the 43-month plunge of the Great Depression. On the other hand, the recession was only two months longer than the 16-month downturns of 1973-1975 and 1981-82, the two other most serious post-World War II periods of falling economic growth. The 2007-2009 downturn was painful but not extraordinary in historical context. What is different about this period is the relative weakness of the economic recovery. As the nearby chart shows, in 1983 the recovery surpassed its previous peak in gross domestic product very rapidly from the recession's trough. Growth rose by 4.5% in 1983, 7.2% in 1984 and 4.1% in 1985, and it kept climbing through the rest of the 1980s. This is the kind of recovery you would expect coming out of a severe recession, since the deeper the trough the steeper the rebound. This time, even after a year of recovery through June 2010, real GDP remained 1.3% below its previous peak in the fourth quarter of 2007, according to the NBER sages. The current recovery peaked with 5% growth in the last quarter of 2009 but has decelerated in 2010—to 1.6% in the second quarter. This tepid growth, in turn, has contributed to the sorry state of job creation, slow business investment and the overall sense of malaise. Our readers know the competing explanations for this undeniably disappointing performance. White House economists and liberals say the financial roots of this recession have made the recovery unusually difficult, the fiscal stimulus saved the day, and thus we need more of it. Our view is that hyperkinetic government policies have done more harm than good, leading to uncertainty and higher costs that have undermined business and consumer confidence and slowed the economy's otherwise natural recuperative powers. Consider this contrast: In 1983, the Reagan cuts in marginal tax rates were finally kicking in, regulatory burdens were falling across the economy, and the Federal Reserve was cutting interest rates. In 2010, taxes are heading up, new regulations are piling up thanks to ObamaCare, et al., and the Fed can't keep interest rates near-zero forever. We think these different policy circumstances are very much related to the different pace of the two recoveries. online.wsj.com