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Posted at 3:41 PM ET, 12/29/2010

Long-term fixes needed

By Jonathan Bernstein

More great blogging from Ezra Klein, in this case two excellent items about the stimulus package.

I think the real policy takeaway here, and in general from the events of 2007-2010, is that the anti-recession regime built after the New Deal could stand to use some tweaking.  Some of the automatic stablizers either don't work as well as they did thirty or more years ago or aren't really as important any more.  For a whole set of reasons, immediate direct employment is harder for the government to do -- but other options, such as a payroll tax holiday, exist now but didn't in 1930.  Most importantly, state budgets are a mess and sabotage federal government recovery efforts.

I'm not exactly optimistic that a deal could be reached to get anything done on this right now.  However, it does seem to me that Democrats, at least, should have this much higher on their agenda than they do now.  It does seem likely that some sort of triggered reactions, with a mix of temporary tax cuts, increased benefits to those who need them (and, importantly, to those who would spend money when the economy needs it), and some sort of deficit-swapping plan with state governments should be on the table.

Given that an ideal Democratic plan would probably involve a fair amount of stuff on the tax side, and given that most governors, including GOP governors, might lobby for the right type of state budgeting scheme, I'd say it's even possible something could pass in the next two years -- if the Obama administration pushed for it, and if one or more Democrats in the Senate took it up as a cause.  But even if it goes nowhere for now, it's an issue that won't go away any time soon.  This -- and not budget deficits -- is in my view the Big Kahuna of Important Long-Term Stuff That Our System Doesn't Handle Well.

Jonathan Bernstein writes about American politics, political institutions and democracy at A Plain Blog About Politics, and you can follow him on Twitter here.

By Jonathan Bernstein  | December 29, 2010; 3:41 PM ET
Categories:  Economy / unemployment  
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Comments

"Given that an ideal Democratic plan would probably involve a fair amount of stuff on the tax side..."

What does this mean?

Posted by: shrink2 | December 29, 2010 4:23 PM | Report abuse

I believe that FAILURE TO ACT ACCORDING TO THE INTENT OF CONGRESS should be included as an Impeachable Offense


Clearly, on putting the death panels in effect AFTER Congress pulled those provisions OUT of the bill falls in there


Also, there are reports that Obama is now playing games with global warming regulations after Congress said NO


Obama does not make the laws in this nation, Congress does


Obama needs to be impeached - he is already out of hand in exceeding his authority.


.

Posted by: RainForestRising | December 29, 2010 4:38 PM | Report abuse

The death panels are back. Great. When they dropped them from the Health Care Reform bill, it broke my heart.

I was so looking forward to Grannie hunting season, and had already spent a lot of money on the gear.

When will the season open? I want to make sure to have my Granny Blind, and Bingo Hall Camouflage Outfit ready on the first day. I am looking forward to crouching down in a Bingo Hall Blind, and playing my "Attention Blue Light Shoppers" call, to lure grannies into range. Anyone know what the daily limit will be, and how much the hunting license will cost?

Posted by: Liam-still | December 29, 2010 4:48 PM | Report abuse

Bernstein


I have to give it to you


You have come up with a new one


The clear implication of your last post against punishing democrats retroactively clearly indicates a preference to punish democrats BEFORE they do something


Makes sense to me


Imagine what the NATIONAL DEBT would be if we could have punished the democrats before they spent the money BEFORE they signed the union contracts

Great Idea.

.

Posted by: RainForestRising | December 29, 2010 4:53 PM | Report abuse

Bernstein


I have to give it to you


You have come up with a new one


The clear implication of your last post against punishing democrats retroactively clearly indicates a preference to punish democrats BEFORE they do something


Makes sense to me


Imagine what the NATIONAL DEBT would be if we could have punished the democrats before they spent the money BEFORE they signed the union contracts

Great Idea.

.

Posted by: RainForestRising | December 29, 2010 4:54 PM | Report abuse

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