Lawrence Summers: Obama's Down Payment; A Stimulus Must Aim for Long-Term Results

[DeepModem Mom]

WP: Obama's Down Payment
A Stimulus Must Aim for Long-Term Results
By Lawrence Summers
Sunday, December 28, 2008; Page B07

....Our president-elect understands both the peril and the promise of the situation and the importance of responding to changing conditions. That is why his economic team is crafting a broad proposal, the American Recovery and Reinvestment Plan, to support the jobs and incomes essential for recovery while also making a down payment on our nation's long-term financial health.

A key pillar of the Obama plan is job creation. In the face of deteriorating economic forecasts, Obama has revised his goal upward, to 3 million. For one thing, significantly fewer positions would be created in the absence of any recovery plan. Second, more than 80 percent of these 3 million jobs will be in the private sector, including emerging sectors such as environmental technology. This is a bold goal. But economists across the political spectrum recognize that it is far less risky to stand firmly against the forces propelling our economy downward than to be timid in the face of a mounting crisis.

The Obama plan represents not new public works but, rather, investments that will work for the American public. Investments to build the classrooms, laboratories and libraries our children need to meet 21st-century educational challenges. Investments to help reduce U.S. dependence on foreign oil by spurring renewable energy initiatives (many of which are on hold because of the credit crunch). Investments to put millions of Americans back to work rebuilding our roads, bridges and public transit systems. Investments to modernize our health-care system, which is necessary to improve care in the short term and key to driving down costs across the board.

Laying the groundwork for recovery and future prosperity will require shedding Washington habits. We must measure progress not by the agendas of interest groups but by whether the American people experience results. We must focus not on ideology but on drawing the best ideas from all quarters. That is why, for example, in key sectors such as energy, Obama is pushing for both public investments and the removal of barriers to private investment. It is also why his plan relies on both government spending and tax cuts to raise incomes and promote recovery.

The president-elect has insisted that investments proposed in the recovery plan meet standards much higher than has been traditional. There will be no earmarks. Investments will be chosen strategically based on what yields the highest rate of return for the economy and monitored closely not just by officials but also by the public as government becomes more transparent. We expect to evaluate and to be evaluated rigorously to ensure that Washington is held accountable for how tax dollars are spent.

Some argue that instead of attempting to both create jobs and invest in our long-run growth, we should focus exclusively on short-term policies that generate consumer spending. But that approach led to some of the challenges we face today -- and it is that approach that we must reject if we are going to strengthen our middle class and our economy over the long run....

(The writer served as Treasury secretary in the Clinton administration and will head the White House National Economic Council in the Obama administration.)

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/26/AR2008122601299.html?nav=hcmodule

[Tansy_Gold]

1. Tax cuts are fine if they go to the lower 90% of taxpayers.

But if you don't RAISE taxes on the wealthy, you will continue the policies that have DIRECTLY CAUSED the current situation.

1. Policies that encourage the shipping of American manufacturing jobs to slave-wage countries are destroying the American economy AND destroying the economies of many developing nations. Policies must be instituted that preserve and protect the American manufacturing base, and if that means higher taxes on corporate profits, so be it.

2. The tax code must be revised so that working people, the people who generate the real wealth of this nation as of any nation, are not disproportionately subsidizing the unearned income of the already wealthy. That means capital gains, especially short-term capital gains, must be taxed at a higher rate than earned income. Inheritances, with appropriate exemptions for surviving spouses and ongoing businesses (including those sacrosanct family farms), should be taxed as unearned income.

3. FICA taxes should be levied on all earned income, not capped.

4. Entities (individuals, partnerships, corporations, LLCs, etc.) which receive tax breaks as incentives to locate in particular states or cities should be required to declare those tax breaks as income for federal tax purposes. (http://www.wvgazette.com/Opinion/Op-EdCommentaries/200807190339)


It can be done, Mr. Summers, but not likely the way you'll plan to do it. You'll perpetuate the policies you've been promoting for decades, and you'll lead us right down the path to fiscal ruin. Well, most of us anyway. You and a few of your closest friends will sit by and watch in mock horror and wonder how all this could have happened. After all you never imagined. . . . . .



Spare me, asshole.





Tansy Gold

[JDPriestly]

2. I'm with you, Tansy Gold.

The problem is not that Americans lack creativity or lack of ingenuity, it's that the wealthy class take American ideas and hire cheap foreign labor to produce the products that Americans innovate. This leaves ordinary Americans out of the equation. Ordinary Americans are receiving a smaller and smaller share of the profit that American creativity makes possible.

The sad thing is that the cheap foreign labor isn't getting its fair share either. A few are greedily grabbing the profits and using them for their personal benefit.

Is that capitalism? Sort of. But capitalism is supposed to be a system in which self-interest, in the end, benefits the common good, not just the good of the few at the top of the economy. Capitalism should result in a strong middle class. But, the very wealthy have learned how to game our political system in order to change our social system to allow the formation of a financial aristocracy. They have perverted capitalism.

It's up to Obama to regenerate capitalism by fostering competition, fairness, trust and the middle class. Your suggestions would promote that regeneration.

[Tansy_Gold]

3. Capitalism is itself perverted.

"Self-interest" is a euphemism for naked greed and it should never be left to the individual (and certainly not the individual corporation or industry) to be able to tell where mere self-interest ends and unrestrained greed begins.

What we're seeing most certainly IS capitalism, taken to its logical end: The search for ever cheaper means of production, the unlimited acquisitiobn of capital into the hands of those who have "earned" it, the complete dismissal of labor as having any real value in and of itself and laborers in and of themselves.

In another day and time I'd have suggested you put down your copy of Atlas Shrugged and run as fast and as far as you can from it, JD. Or, if the pull of capitalism is so strong, at least back slowly away from it until you break free of its magnetic pull. Today, however, I would suggest you just read the last few pages again.

The perfect capitalists, the ones who never did anything but in their own best self interest, especially in the long term, set out to destroy the world. Only when the lights went out in New York City and Galt could make the sign of the dollar "over a desolate earth" did they decide it was all right to come back and rebuild the world to their liking.

The capitalists are not your friends, JD. They would leave you on the railroad track to nowhere just as surely as and with no more remorse than Dagny Taggart abandoned Eddie Willers.



Tansy Gold