IMF backs Obama economic plan
Someone please forward this to Mitch McConnell and the RNC.
Olivier Blanchard, the IMF's chief economist, said "the size corresponds roughly to what we think is needed." He backed the Obama approach of targeted tax cuts, saying the money should go to consumers who are "truly credit constrained.".
In an accompanying research paper, Mr. Blanchard and three other IMF economists advised against broad cuts in corporate tax rates, dividends and capital gains -- Republican favorites -- which they judge "likely to be ineffective" because profits are low.
posted by mikevotes at
10:45 AM
4 Comments:
OK, so the WSJ is now printing stories critical of supply-side economics? Sure, they mention that a "former Bush White House economist" disagrees with the IMF, but overall it's critical.
While it's nice to believe that the wealthiest Americans will invest domestically and "spread the wealth" (irony?), history has repeatedly shown that they won't. Any (marginal) investment resulting from tax cuts is instead "off-shored" or restricted to the wealthy by huge bonuses.
The real danger emerging now is that "stimulus cheques" will instead be used by the non-wealthy to alleviate their crushing debt, which is what has kept the economy moving as long as it has been. Even in this case, however, the "stimulus" ends up going to the wealthy creditors - who in turn fail to do their part and instead further restrict credit.
The wealthiest Americans have essentially been "on strike" for an even bigger piece of the economic pie for decades, while Republican Administrations have been providing them with "strike pay". Honest economists realise this, and "supply-side" is falling out of favour.
By
Todd Dugdale , at 11:50 AM
Fully agreed.
And from past "tax rebates," a huge portion goes to debt relief/creditors. No reason to think it would be substantially different this time, especially with so much more debt piling up.
As for your last point, my question would be "to what degree does supply side live on as a political carcass, after the economists abandon it? How long does it's critical place in the Republican dogma and coalition maintenance keep it alive as a force?"
By
mikevotes, at 1:48 PM
As for your last point, my question would be "to what degree does supply side live on as a political carcass, after the economists abandon it? How long does it's critical place in the Republican dogma and coalition maintenance keep it alive as a force?
As long as some shill is still capable of stating (with a straight face) the words "I've never been employed by a poor man", then the idea will remain credible to The Faithful.
If nobody has money to buy what the rich man is selling, however, then that potential job is non-existent. This seems lost upon supply-siders, though.
How long? The answer, my friend, is blowin' in the wind. The Republicans will abandon it when it stops working, like their historic opposition to the Civil Rights Act or women's suffrage.
By
Todd Dugdale , at 6:29 PM
It's weird. In the effort to band in the business side of the party into the religious (less rich) social part of the party, they've had to dogmatize their economic positions.
What I'm saying is that their efforts at appeal have now become a "core belief" of the rest of the party, so even if the business folks wanted to back away, the party can't.
By
mikevotes, at 9:30 PM
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