While I still don't understand the political calculus (see here) - why should tax cuts for the richest Americans be a necessary trade-off for expanding jobless benefits at a time when the unemployment rate is approaching 10%? - I support the deal on its merits because the overall effect will be at least marginally more stimulative of the economy at a time when many inside and outside of Washington are calling for budget austerity to reduce the deficit. I continue to believe that unemployment, not the debt, is public enemy #1.
Tuesday, December 7, 2010
What I Like About President Obama's Deal with the Republicans
What the Republicans get: tax cuts extended for everyone and a lower estate tax, with an exemption for the first $5 million and a top rate of 35%. What the Democrats get: a 13-month extension of jobless benefits, a 2% reduction in Social Security payroll taxes on all wage-earners for one year, and a continuation of the college-tuition tax credit for some families (see here).