News vs entertainment

We’ve all been watching the national pissing match over tax cuts and unemployment extensions, I’m sure. Miss the chance to watch a bunch of quacking heads and a veritable plethora of economists endlessly navel-gaze? Never!

I hold mainstream news in utter contempt, and this is why: dozens of hours of coverage, and not one expert has mentioned that in the immediate wake of the debt council, deciding to lower taxes and increase spending may not be the wisest choice.

Bread and circuses.

Parenthetically, I particularly hate Fox News and can’t take more than a few minutes of their brand of crap. I usually watch CNN or MSNBC. Surprised? The socialist news lies, but the corporatists waver between lying and telling the truth albeit stating very sincerely that true patriots ought to take their lumps like a man. I can handle media lies, but the latter just pisses me off. YMMV.

Published in: on December 9, 2010 at 8:24 am  Comments (6)  

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  1. not one expert has mentioned that in the immediate wake of the debt council, deciding to lower taxes and increase spending may not be the wisest choice

    Well, actually, many commentators have. But only with respect to the tax cuts for those making more than $250,000. That concern doesn’t appear to apply for most on the right, and it doesn’t seem to concern anyone (right or left) with respect to the “middle-class tax cuts,” even though their effect on the debt is probably 3 or 4 times the effect of the “tax cuts for the rich.” 🙂 (Occasionally you see comments about how middle-class tax cuts are more stimulative, and therefore worth the increased debt in a way that tax cuts for the rich are not. But I suspect those comments based on “common sense”/unfounded assumptions that may not be correct or else based on studies from earlier periods that may not be applicable in the specific conditions we find ourselves today.)

    • I must have missed that commentary, because it was the first thing *I* thought and I didn’t catch it elsewhere. (Well, not true. It was echoed in alternate media; I only didn’t hear it in mainstream.)

      Cherrypicking and spin is de rigeur for the MSM, whichever way the slant leans. I just about went spare listening to an AM radio show airing a clip of Pelosi claiming every dollar of unemployment enriches the economy by two dollars, and then the show tried to explain to listeners why this made total sense.

      Everyone is too wrapped up in social causes and kicking the can down the road. I feel for good people who lost their job and grandmas that can’t afford their medications. It doesn’t change the math, though. Math has no emotions and can’t be persuaded by spin or bleeding heart tales. Math just is. And the math says we can’t afford our current budget. It’s insanity to suggest we worsen an already catastrophic financial situation.

      Preaching to the choir, I bet.

  2. I ran across an interesting analysis, on a “progressive” site — so presumably not biased in favor of the rich 🙂 — that projected the effects on employment of various components of the package.

    Middle-class tax cuts – $360 billion; 940,000 jobs created. That would be roughly $383,000 per job created, if my math is correct.

    Tax cuts for the rich – $120 billion; 290,000 jobs created. That would be roughly $414,000 per job created.

    Definitely worth adding to the debt level, don’t you think?? 🙂 That site suggests it would be better to drop the tax cuts for the rich entirely, or else redirect it to the payroll tax cut, since there’s not much bang for the buck from the tax cuts for the rich. Surprisingly, it didn’t make the same argument regarding the middle-class tax cuts . . . .

    (Here’s the link.)

    • Sorry for the delay. I was en route from Denver.

      Yes, I love their math and selective logic. It makes you despair, it really does. There’s so much in that article that makes me want to sit people down firmly with a pen and paper while I stand over them with a ruler until they get it right.

      First, tax extensions create no new jobs. None. We are not cutting the tax rate no matter how often media and talking heads use the words “tax cuts”; we are maintaining the current tax rate. No one will, upon finding out that their taxes for next year will be THE SAME as last year and the year before et cetera, say, Whoopie, I have more money to spend to stimulate the economy and create jobs!”. They have the same amount of money.

      Note also that the two-year cost of the 100 percent expensing provision for business investment, at $180 billion, is much larger than the 10-year budget cost. This is because the effect of the policy is to move future investment forward and as a result, tax revenues will be lower now, but higher later.



      Pulling demand forward is short-term stimulus with a built-in collapse. It’s intentional bubbling. Preaching to the choir again, I’m sure, but if we ought to have learned anything over the last decade it’s that spending future growth today means 1) the future always becomes today and 2) when it does, we’ve already spent that growth. We then have to pull demand forward again just to maintain the status quo, and to achieve growth we have to pull forward at an increased pace from the last time we did it. And then again a couple of years after that, and even harder. Rinse and repeat until the bubble collapses.

      It isn’t growth, it’s the illusion of growth. It’s debt creation, and the check always comes due.

  3. And an interesting blog refuting the standard line that tax cuts should go to the middle class but not the rich because the former spend them (stimulating the economy and creating job) while the latter save. Not only is the job creation effect minimal if any, as noted above, but a study of the 2008 tax cut shows that: (a) the poor spend a higher percentage of the refund; but (b) the rich are next, still spending a significant percentage; and (c) the middle-class are the least likely to spend, and more likely to pay down debt.

    The real reason for favoring the middle-class tax cuts (and extending them permanently, as was the original plan, rather than temporarily) was never very plausibly for the stimulus effect. That was just the justification, and flawed as noted. The real reason was redistribution of wealth and reduction of the extent of inequality.

    • The real reason was redistribution of wealth…

      I’m not the only one who considers this to be class warfare, then.

      I’ve heard this dubbed the biggest stimulus bill ever at $1T. What a load of crap. $700 billion of that is the “cost” to the government of letting you keep your money. This is in the running for one of the most alarming and dangerous things I’ve heard lately (or ever). The implication is that 100% of your income is government property.

      I suspect the Founders ought to have left the original wording at “life, liberty and property”. On the other hand, since the
      Constitution is for the most part ignored in all other respects it might not have done us any good anyway to have it stated that bluntly.

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