Seeking Alpha

Our "dysfunctional and corrupt political culture" may extend the Bush tax cuts for the wealthy,...

Our "dysfunctional and corrupt political culture" may extend the Bush tax cuts for the wealthy, Paul Krugman writes, even though "it’s hard to think of a less cost-effective way to help the economy than giving money to people who already have plenty." But a new BofA (BAC) research note says allowing the cuts to expire could trigger a double-dip.
Comments (24)
  • hehehe - my sainted mother used to refer to "the pot calling the kettle black".


    Then again, maybe it is the Midas tendency in Keynesians who want it all centralised. Keynes himself said in his introduction to his German edition that his system works best in a totalitarian government.
    23 Aug 2010, 10:42 AM Reply Like
  • Let's see, instead of allowing the private sector to retain money, no matter their wealth or income level, we're supposed to be better off giving it to our "dysfunctional and corrupt" -- not to mention wildly socialist -- Administration for them to use for their own self-serving, control-enhancing purposes?


    Such a view surely fits the consummate socialist, Mr. Krugman, who would have us contribute all of our wealth to government, if possible.
    23 Aug 2010, 10:45 AM Reply Like
  • Agree 100%. Now if he was willing to pair the tax increases with several hundred billion in spending cuts and reforming social security then I'd gladly sign up.
    23 Aug 2010, 12:25 PM Reply Like
  • The fastest way to get this over with is to turn this guy loose and let him go. Let him do it his way.. OR he needs to stop babbling. So much for that up day.
    23 Aug 2010, 10:48 AM Reply Like
  • Who's "giving" money to the wealthy? This is the problem with government and elite, like-minded individuals. They think that it's government's money, and that they would be giving it to the "wealthy." How about we call redistribution what it is: legalized theft.
    23 Aug 2010, 10:53 AM Reply Like
  • Someone needs to pay for W Bush mistakes, tax cuts and 9 years of war with borrowed money from China.
    23 Aug 2010, 10:54 AM Reply Like
  • Not that W didn't do plenty of stuff wrong (and helped spend way too much money on various things), but that tired old MSM meme about the deficit/bad economy/why you can't get a date/everything else bad in the world, etc. being W's fault is just nonsense...the deficits exploded when the Democrats gained control of Congress...the deficits got even worse when the Democrats gained control of the White House, too.

    23 Aug 2010, 11:05 AM Reply Like
  • The deficits exploded because Bush-Boy hid all his spending "off-budget". Where was the Tea Party when this crap was going on?
    23 Aug 2010, 12:56 PM Reply Like
  • From a spending perspective, it doesn't seem to matter whether we let them expire or keep the cuts in place. This congress and this administrations seem to want to spend money regardless of their yearly inlays. Let's not single out the democrats, though. The Bush administration also encouraged throwing good money after bad. There needs to be a paradigm shift in Washington before this will change.
    23 Aug 2010, 11:02 AM Reply Like
  • Guys like Krugman have a 40 year record of bad policy advice and failed economic forecasts, but that doesn't seem to stop him...
    23 Aug 2010, 11:02 AM Reply Like
  • I can think of a less cost effective way help the economy, lets let the banks borrow at 0.25% from the government and put the money in government backed bonds at 10x that amount. Hard to see who that helps (aside from banks).
    23 Aug 2010, 11:02 AM Reply Like
  • I'm all for seeing the New York Times cut Paul Krugman's salary so as to reallocate it to some lower paid but less intellectually challenged writers.
    23 Aug 2010, 11:13 AM Reply Like
  • I have said it before and I will say it again, government can't possibly 'spend' money as efficiently as private individuals.


    If my neigbour needs a new dishwasher, while I need a new car and my other neighbour needs to save to pay for his child's university studies, how is it that sending our money to the government and having them spend it on whatever they will, going to produce the best outcome?


    If money isn't being spent efficiently, then even if businesses meet that inefficient and artificle demand efficiently, such capital allocation still doesn't produce overall maximum benefit because the other side of the equation - that being demand, is impure to begin with.


    Secondly, there is a very simple concept that no one can argue with or claim not to understand. The more people involved in a transaction, the more expensive that transaction will be.


    Example A: Retail store buys product from supplier who imports product from factory based on the advice/relationship of an agent. Product goes from factory to supplier to store and agent gets kickback from factory for order.


    Example B: Retail store buys product from factory directly, by-passing supplier and agent. Product is shipped directly from factory to store warehouse.


    Now, which product scenario would result in a lower cost to the retailer and best outcome to the consumer?


    Same example can be applied to consumers and business interacting free of interference and involvement from big government.


    That is not to say that government doesn't have a role, like a referee in a hockey game, from ensuring that participants in the marketplace play by the rules and don't cheat their opponents. As with referees, government shouldn't be one of the 3 stars at the end of the night, they should be an entity that no one mentions or even notices because they had such little impact on the game itself.
    23 Aug 2010, 11:19 AM Reply Like
  • On a theoretical level what you say is true. But government does have a role to operate in areas where an individual can't reasonably be expected to perform. Thus, the government has a role in terms of maintaining an army, NASA, national parks, and regulation. When the government oversteps its role and becomes too big it distorts rather than facilitates capitalism. And that is where we currently are at - government picking winners and losers, government determining who will live well and not so well, the emergence of the idea that the elite in government are going to rule your life, etc.


    Since the article is about raising income taxes, I will say that I have no objection to paying more taxes....... BUT I want it joined at the hip with hundreds of billions of spending cuts, a higher Social security retirement age, killing the health care fiasco and a reforming of our tax system. And that would force a return to personal responsibility.


    You see, I realize that we have a 13 trillion dollar debt to be repaid. I may not like how we have arrived here, but we have to be serious about addressing it. And from a practical perspective, that means that we have to pay more in taxes to pay it down. And it means that we have to severely cut government spending across the board. It will mean a return to the day where people saved 10% of their income.... because they didn't have the expectation that the government was responsible for taking care of any bad things that might happen in the world. As Reagan said... Government isn't the answer to your problem, government is the problem.
    23 Aug 2010, 12:37 PM Reply Like
  • It would have been nice if the "government" had gotten involved in regulating things like egg producers and TBTF banks.
    23 Aug 2010, 12:57 PM Reply Like
  • Gov't destroys everything it meddles in.


    Our economy would boom if the current tax code were scrapped and instead we had a flat or "fair" tax for individuals & corporations alike.
    23 Aug 2010, 12:12 PM Reply Like
  • If it's "flat" it ain't "fair".
    23 Aug 2010, 12:58 PM Reply Like
  • Herbert,


    If someone earns $1 million and pays a flat tax of 20%, they pay a total of $200,000. If someone earns $50,000 and they pay the same 20% flax tax, they only pay $10,000.


    If you aren't satisfied with this and believe the millionaire should pay even more than 20 times what the $50K earner pays, then you should go live in North Korea.
    23 Aug 2010, 01:33 PM Reply Like
  • Let's say you make an even million this year. For simplicity's sake, assume a 10% flat tax. You pay $100,000 in income tax. I, on the other hand, will make only $100k this year. My income tax is $10,000. What's not fair about that?
    23 Aug 2010, 01:37 PM Reply Like
  • Positive: Obviously, you & I are like-minded on the issue. Notice we each got a thumbs-down from herbert....
    23 Aug 2010, 02:25 PM Reply Like
  • Yes, Herbert is the type that will only be happy when others are paying for his lifestyle - typical liberal.
    23 Aug 2010, 02:35 PM Reply Like
  • Krugman is the epitome of a D-Bag. Massengill should really sign this guy up!
    23 Aug 2010, 01:21 PM Reply Like
  • Krugman lays bare the liberal-think of the elite....only in their warped universe is maintaining existing tax schedules "giving money to people".
    It's time to flush the Krugman's of the world away and with
    them all of their 1984 doublespeak.
    23 Aug 2010, 02:23 PM Reply Like
  • “The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money”


    Alexis de Tocqueville (French Historian and Political scientist. 1805-1859)
    24 Aug 2010, 10:39 AM Reply Like
DJIA (DIA) S&P 500 (SPY)