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John Boehner's stale 'two-step job creation plan'

PH2010090400104.jpgMinority Leader John Boehner is proposing what his members are calling a "two-step job creation plan." The two steps? Pass a budget that costs only as much as the 2008 budget, and extend the Bush tax cuts for everyone, including the wealthiest Americans.

So on the one hand, a measure that will make a small dent in the deficit. On the other hand, a measure that will lead to a huge increase in the deficit. There's no theory of the economy in which this really makes sense: If the market is worried about the government's finances, this makes them worse, not better. If we need lower tax rates, then simply holding the tax rates at the level that produced 2010's disappointing economic performance isn't enough.

It's also worth noting that these policies are both stale: The Bush tax cuts are, well, the Bush tax cuts. They're tax policy from 10 years ago, designed to deal with a very different set of circumstances. And the 2008 budget is, similarly, just an arbitrary number from some point in the past. Our economic situation has changed dramatically in the past few years. Don't Republicans have any fresh thinking on what to do about it?

Photo credit: Pr Newswire Photo.

By Ezra Klein  |  September 8, 2010; 11:23 AM ET
Categories:  Stimulus  
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Comments

You're mistaking "John Boehner talking about what makes for a good soundbyte" with "John Boehner talkign about good economic policy" We've seen extensive evidence he doesn't give a hoot about godo economics, or really anything that doesn't result in more money going from the poor to the rich.

Posted by: EricS2 | September 8, 2010 12:03 PM | Report abuse

Unless Obama shows the guts and Liberals come around saying this loud what Sen. McCaing said - 'this is a class warfare'; nothing else matters. Everything else is just beating around the bush.

It is indeed class war.

Until Dems are ready to accept that and fight for it (not extending Bush tax cuts for wealthy), they will continue to get shoved around by American People.

Obama is trying to make a stand here, but still it is tentative and not hot enough. Rest of the Liberal Dems need to come around too so Americans are clear about what the choices of Nov 2010 election:
- GOP for extending tax cuts for rich while
- Dems wanting to shore up revenues by taxing rich.

Posted by: umesh409 | September 8, 2010 12:10 PM | Report abuse

I'm with EricS2, Boehner needs something simple that 'average Americans' can pretend to understand. Deficit? BAAAAAD 2008 (pre-October)? GOOOOOOOOD Taxes? BAAAAAD Bush? UHHHHHHHHHHH, we're not talking about him.

Posted by: Jaycal | September 8, 2010 12:38 PM | Report abuse

Look, the overall plan is what it has always been -- ultimately, to substitute the payroll tax in place of income taxes, thereby shifting the tax burden permanently away from the wealthy while simultaneously defunding Social Security and Medicare.

They've been running this scam since the Reagan administration and the only reason it is blowing up now is the impending retirement of the boomer generation. Payroll tax surpluses, generated under the Greenspan plan to "save Social Security," have been used for all these years to purchase Treasury notes which in turn finance tax cuts for the rich.

Now, those notes are coming due, which is according to plan. As they are redeemed, they will pay for the boomer generation's retirement. But to redeem them requires revenue and the only place to get that revenue is income taxes.

Again, this was the plan. But after three decades of making out like bandits under that plan, the wealthy would really like to renege on the back side of the deal.

They want to keep their tax cuts, which means continuing to use the payroll tax to finance general operations, which in turn means defunding Social Security.

Posted by: pj_camp | September 8, 2010 12:48 PM | Report abuse

Won't somebody from our elite press corps in DC ask Mr Boner how his plan worked out for employment in, say, 2008, when it was actually in place?

Posted by: damonchild | September 8, 2010 12:49 PM | Report abuse

Why should the speaker in waiting provide any actual new ideas? The american people are clearly being fooled by the same old ones.

If you listen to the republicans on the rare occasion that they actually propose an idea its the exact same agenda they have had for the last 3 decades with the exact same ideas they have always proposed to get there. And yet the majority of voters seem happy with this even though a reasonable person would ask why are we in this mess if these policies are so great? Unless and until the voters of this country demand actual plans with actual answers from republicans instead of blindly handing them their votes because "democrats bad" why should they do anything differently? That goes for "reporters" too. Until they actually act as journalists instead of transcribers of failed policies and blindly hypocritical political attacks why should the republicans act any differently?

I'm with damonchild, has a single solitary "reporter" asked the speaker in waiting why this would help us at all given that the economy lost, what, 3 million jobs in 2008, the year that, you know, this was all already done?

Posted by: StopThePlanetPlease | September 8, 2010 1:04 PM | Report abuse

Against deficits before I was for them.

Posted by: photek00 | September 8, 2010 1:16 PM | Report abuse

Ummmm, reinstating a budget the size of the Bush budget of 2008 would not "make a small dent in the deficit". Obama's deficits are a trillion dollars a year higher than Bush's were.

And extending the Bush tax cuts for the non-wealthy will cost 3 trillion dollars.

The Bush tax cuts need to expire in their entirety AND we need to return to the spending of the Bush years.

Posted by: bgmma50 | September 8, 2010 1:20 PM | Report abuse

Has he said what spending he would cut to reduce the budget to 2008 levels?

Posted by: tl_houston | September 8, 2010 1:20 PM | Report abuse

"Our economic situation has changed dramatically in the past few years. Don't Republicans have any fresh thinking on what to do about it?"

There's no need for fresh thinking when the old thinking worked so much better.

Obama's policies are like the New Coke. No thanks.

Posted by: krazen1211 | September 8, 2010 1:45 PM | Report abuse

"Our economic situation has changed dramatically in the past few years. Don't Republicans have any fresh thinking on what to do about it?"

There's no need for fresh thinking when the old thinking worked so much better.

Obama's policies are like the New Coke. No thanks.

Posted by: krazen1211 | September 8, 2010 1:45 PM | Report abuse

Well DUH, if we keep taxes at their current levels people will rejoice and we'll receive LOADS more tax revenue because... um... socialism lost?

Posted by: will12 | September 8, 2010 1:47 PM | Report abuse

"Has he said what spending he would cut to reduce the budget to 2008 levels?"

With any luck, Medicaid.

That's $300 billion slashed that could be used to build in real infrastructure programs.

Posted by: krazen1211 | September 8, 2010 1:52 PM | Report abuse

tl_houston:

"Waste and fraud".

Posted by: lol-lol | September 8, 2010 2:31 PM | Report abuse

@tl_houston - Well, since the stimulus has already reached is maximum rate of distribution, and will only wind down from here, he can claim credit for that. Granted, that's a bit like claiming credit for it being sunny outside, but hey-ho!

It's also going to have almost no impact whatsoever on deficit spending. The current deficit is caused in large part by the massive fall in tax revenues due to the recession, and it's unlikely that will correct itself overnight. Although, as krazen pointed out, we can always slash Medicaid, or perhaps unemployment insurance. All those newly poor people are such a bloody drag on the budget. Peasants.

Posted by: strawman | September 8, 2010 2:51 PM | Report abuse

The economic recovery in the US is coming to an abrupt end. Pundits keep trying to guess when consumer spending and business investment will pick up the slack, but the answer is quite easy – It’s jobs people!!

I charted Unemployment vs the S+P and the year to date chart shows how the market follows the jobs data up and down. If we want a real recovery, that is sustainable, it has to be backed by jobs, not just printing money by the fed.

Here is that chart --> http://www.hiddenlevers.com/hl/u?cg2jFc

Posted by: prime99 | September 13, 2010 2:35 PM | Report abuse

The economic recovery in the US is coming to an abrupt end. Pundits keep trying to guess when consumer spending and business investment will pick up the slack, but the answer is quite easy – It’s jobs people!!

I charted Unemployment vs the S+P and the year to date chart shows how the market follows the jobs data up and down. If we want a real recovery, that is sustainable, it has to be backed by jobs, not just printing money by the fed.

Here is that chart --> http://www.hiddenlevers.com/hl/u?cg2jFc

Posted by: prime99 | September 13, 2010 2:38 PM | Report abuse

The economic recovery in the US is coming to an abrupt end. Pundits keep trying to guess when consumer spending and business investment will pick up the slack, but the answer is quite easy – It’s jobs people!!

I charted Unemployment vs the S+P and the year to date chart shows how the market follows the jobs data up and down. If we want a real recovery, that is sustainable, it has to be backed by jobs, not just printing money by the fed.

Here is that chart --> http://www.hiddenlevers.com/hl/u?cg2jFc

Posted by: prime99 | September 13, 2010 2:40 PM | Report abuse

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