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Obama Will Not Extend Bush-Era Tax Cuts, Economists Warn Against Austerity

US Politics & Gov't  (tags: abuse, americans, budget, congress, dishonesty, economy, elections, government, Govtfearmongering, lies, mccain, media, obama, politics, propaganda, republicans, Taxes )

- 2041 days ago -
Some GOP members conceded that the modest tax increase for the wealthy in the president's budget plan "is not going to break their backs."

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Kit B (276)
Wednesday November 14, 2012, 4:01 pm
(Photo: Doug Mills / The New York Times)

Tensions are growing in Washington as the year-end "fiscal cliff" approaches, and in his first press conference since June, President Obama confirmed that he would not compromise on allowing Bush-era tax cuts for the wealthy to expire while extending tax cuts for the middle class.

The president's budget plan would raise $1.6 trillion in revenue, including new revenue from tax increases on Americans making more than $250,000 a year.

Congress could soon reach a familiar gridlock as a combination of tax cuts, spending initiatives and unemployment benefit extensions are set to expire on January 1.

Obama, who is expected to launch Congressional negotiations at the end of the week, said today that Congress must "provide certainty" to middle-class families making less than $250,000 year that their taxes will not go up. After that, Obama said, lawmakers can set a structure to deal with tax reform and entitlements in order to stabilize the deficit.

Republicans are generally opposed to any tax increases, but Obama said that some members of the GOP have suggested that a modest tax increase on the wealthy "is not going to break their backs."

Progressives in Obama's base are applauding the president's budget plans but warn that Washington's obsession with cutting spending could threaten the nation's economic recovery.

In a statement promoted by the nonpartisan research and education center Institute for America's Future, 350 prominent economists called on Congress to boost government spending to stimulate the economy instead of imposing austerity measures.

"As even Federal Reserve Chairman Ben Bernanke recognizes, it is long term unemployment, not excessive deficits or debt, that is now inflicting the greatest human toll and economic damage," the economists argued. "Polls show that voters agree joblessness and a bad economy are much higher priorities than deficits."

Government spending to improve infrastructure, clean-energy growth and the nation's ailing education system will create jobs, improve the lives of Americans and, over time, generate the tax revenues needed to fix the deficit, the economists argued.

Teresa Ghilarducci, director of the Schwartz Center for Economic Policy Analysis at The New School and a co-signer on the statement, said today that economic recovery requires government action to spur the economy and encourage banks and corporations, which are sitting on massive sums of cash due to economic uncertainties, to free up those resources and create jobs.

"The problem now is slow growth that has created the 7.9 percent unemployment rate," Ghilarducci said. "Any austerity, any budget cuts will just make that worse."

Ghilarducci estimates that $120 billion in aid to struggling state governments could create about a half-million jobs in the next year.
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By Mike Ludwig | Truthout |

JL A (281)
Wednesday November 14, 2012, 4:48 pm
"The problem now is slow growth that has created the 7.9 percent unemployment rate," Ghilarducci said. "Any austerity, any budget cuts will just make that worse." Thanks Kit for helping ensure more people get factual economic information relevant to the budget decisions remaining in 2012 instead of the faux talk of deficit and austerity being essentials even though such an approach would be expected to send us into a full blown depression. "The problem now is slow growth that has created the 7.9 percent unemployment rate," Ghilarducci said. "Any austerity, any budget cuts will just make that worse."

Lois Jordan (63)
Wednesday November 14, 2012, 5:28 pm
Noted. The Obama Admin. must be looking at Europe to see how austerity has taken its economic toll there--the US must not follow them into the black hole. The Pres. made many statements during his 1st term that he ended up backtracking on, much to my dismay. I like what he's saying, but I'm not holding my breath and will continue to exert the pressure of letters and petitions to him as well as my Congress critters. It's smart to just let the Sequestration "Grand Bargain." Obama will then have more power to go to Congress requesting middle class tax cuts and other important fixes to our safety net.

Sandra M Z (114)
Wednesday November 14, 2012, 11:01 pm
There is no need for "austerity", there is plenty of money. That is a con worldwide, these riches have come from the work of centuries, really, and it is everyone's birthright to have their share.

So few hoarding the money of the 99%, well, people can't spend hot air! Bring that hidden money out to play. There is more than enough for everyone, if it is spread around to re-seed our country. Win Win. Everyone winning is key to LIFE LIBERTY and the PURSUIT OF HAPPINESS on this Planet.

Noted, Thank you Kit..


Nancy M (169)
Thursday November 15, 2012, 9:15 am
INteresting article Kit. I was hearing on the Sunday News shows a proposal to let them all expire and then come back in January and totally redo what the cuts should be. That way everyone would be voting on giving cuts to people rather than increasing some but not all. Weird.

Yeah Sandra. J. Paul Getty said soemething about money being like manure- only good if you spread it around. Otherwise, it stinks.

Kit B (276)
Thursday November 15, 2012, 10:09 am

I can't say J Paul Getty is by any means, someone I respect. I think he had a very different take on that quote.
We have the past and current economic policies as a model for what does not work, Obama is making the effort to "plow new soil" if you will. The policies of FDR, will not work today, though that in now way diminishes what he did in his time. Obama, is attempting to lead this country in a new direction, one that is designed to fit the needs and economic realities of the current world. Austerity, is actually has not had positive outcomes for either the wealthy, or the real people. It has proven destructive for governments, business and the people. Isn't time for a rethink?

"If you can count your money, you don't have a billion dollars"
J. Paul Getty

"Oil is like a wild animal. Whoever captures it has it."
J. Paul Getty

"Money is like manure. You have to spread it around or it smells."

J. Paul Getty
Having read enough about this man, when he talks of spreading it around - he means more investments to grow his money. Not share the wealth.

Theodore Shayne (56)
Thursday November 15, 2012, 3:24 pm
I guess if you really want to make them feel the love; revamp the capital gains sector.

Russell R (87)
Friday November 16, 2012, 12:21 pm
Let the Bush Tax cuts expire - cut all subsidies to big oil and gas - get rid of all the loopholes - no tax deductions on donations (a donation is a donation, not something that others reimburse you for!)
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