An excellent overview which I plan to use tomorrow when I work at an Obama campaign office.  There are still "undecideds" out there (as David Sedaris notes, trying to make up their minds between servings of the chicken or the shit with broken glass), and if I can find a reasonable one or two or three, I'll try to appeal to their pocketbook.  Thanks.  

 

This:

"But we're also experiencing a period of massive deficit spending, so we need to balance the books. We can cut some spending, but we also need to increase revenues. The only way to accomplish both goals at the same time is to cut taxes on most people and raise them on the people that are the most comfortable."

is dead wrong.  Didn't you read Krugman's call for fiscal stimulus. Even conservatives are conceding the need for Keynesian pump priming. You do not try to balance the budget going into a recession. Fiscal stimulus means increasing, yes, increasing the deficit. What Hoover did wrong and FDR too, at first, was try to balance the budget. It wasn't the tax increase per se; it was that he was taking more money out of the economy than he was putting back in.

This is basic Keynes. When the economy is contracting, tax revenues will naturally decrease, and, if the government keeps its deficit at the same level, it's spending will go down too. Government spending stimulates the economy. World War II didn't get us out of the depression because war is good for the economy; it did it because deficits are how you stimulate a depressed economy. Milton Friedman believed monetary stimulus - cutting interest rates - could do the same job, but that looks dubious now, and, in any case, there isn't far to cut them.

Tax cuts are not a bad idea because they increase the deficit. Spending increases are good for the same reason. Which is better depends on what you are taxing and where you are spending.  In a sense, Obama is lucky; other than media and popular ignorance, the economic case for government spending on health care, say, or alternative energy is now stronger because we must spend to provide fiscal stimulus. The advantage of tax cuts is that they are faster, but increased spending gives us long run advantages like health care and energy. And there is also a good case for monetizing a considerably amount of this debt. Normally, that is inflationary, but in a recession or, especially, depression, especially one involving a credit crunch, there are deflationary pressures to counteract this. Some reforms that should probably be taken, such as increasing reserve requirements, are also deflationary. If we monetize, we are neither taking it from China nor passing it on to our children. It will probably bring down the dollar internationally, but that die seems pretty well cast in any case. The biggest problem Obama has with his policies right now is the popular and media superstition that a downturn should be met with belt-tightening.

   His cut for 95% of us is stimulative but will lose some effect due to the amount of goods we import. A public public work project directed at infrastructure would be beneficial. Moneys spent on that will create tangible assets and salarys paid will then be spent and taxed again locally. He looked at this earlier when he spoke of a windfall profits tax on the oil companies that was to be redirected to infrastructure. Some sort of tax on speculative trading is in order. The tax cuts have to be stimulative given so much has been squandered. Spending increases mainline to the economy making goevernment projects appealing. The upper 5% need their money put to work we cannot afford to wait for it to trickle down. That does not work it and is not healthy for the economy.

"We have always known that heedless self-interest was bad morals; now we know that it is bad economics;" - Franklin Delano Roosevelt

WTF? Why would a progressive have a problem with Obama's tax plan?

the way I see it, his cut actually WILL stimulate the economy. The fundamental flaw in the Bush tax cuts was that wealthy people drive the economy. they don't: they already have what they need, and don't by lots of small and mid-ticket items.

Middle- and working-class people buy all sorts of shit when they have money: cheap toys for the kids, refrigerators, dvd players, cd players, groceries for a family of 5 every week.

Bring on the tax cut so i can feed my family!

John Mccain Called his wife WHAT??