Originally Posted by deecue
I wonder how much data is behind the assertion that temporary tax cuts don't change incentives and therefore are unhelpful. I keep on hearing this line of argument and always find it a bit odd. Based on my high-school economics understanding, the idea behind this sort of temporary fiscal policy was to try and reaccelerate the economy during a downturn in the business cycle, which if the market accepts should work its way into actual reality. If the market rejects this overall concept as much as republican pundits seem to, however, then this fiscal policy is probably much less useful. Like most things, I guess it depends on how much a downturn is attributed to long-term structural economics versus the economic cycle. Would someone like to correct and/or corroborate my understanding, which is admittedly shaky?
Temporary cuts to payroll tax... When will it return to normal? How will we recoup the loss to Social Security? Isn't Social Security already in trouble? That's why the Republicans are balking at this. And Obama and Harry Reid are using it to demonize them, of course.
I think it's cool how they've tied it to the approval of the Keystone Pipeline project. Harry Reid is scandalized...never heard of such a thing!