Wednesday, June 8, 2011

Barack Obama's line in the sand? "Obama Team Eyes Payroll Tax Break for Employers" How many times can so many be so stupid?

Where under the [Roman] Principate the strategy had been to tax the future
to pay for the present,
the Dominate paid for the present by undermining the future’s ability to pay taxes.

The Empire emerged from the third century crisis,
but at a cost that weakened its ability to meet future crises.

Joseph Tainter,
The Collapse of Complex Societies

"President Barack Obama’s advisers have discussed seeking a temporary cut
in the payroll taxes businesses pay on wages
amid economic reports suggesting the recovery is slowing...

How big of a hit would another payroll tax cut be
to our $1.65 trillion deficit?

The idea...people said on condition of anonymity to discuss internal deliberations.

...The talks reflect the political constraints the White House is operating under
with the Republican majority in the U.S. House pushing to cut federal spending.

A hiring stimulus based on a tax break for employers may appeal to Republican lawmakers,
many of whom have called for measures to help businesses.

If a nation prints more money,
like cutting a 16 inch pizza into 12 slices instead of 8,
is each slice worth less?

The idea of a cut in the employer contribution to payroll taxes
also has recently been under discussion among Republican members of Congress,
said Douglas Holtz-Eakin,
who was chief economic adviser to the 2008 Republican presidential nominee,
Senator John McCain.

Douglas Holtz-Eakin?

Is he really a lobbyist at this point?

...A temporary break in payroll taxes would echo a centerpiece of the deal
Obama and congressional Republicans reached in December 2010
to extend tax cuts enacted during the presidency of George W. Bush.

What if the pizza shrinks while the number of slices rise?

That package included a 2-percentage-point reduction in employee contributions
to the payroll tax during 2011.

Didn't it cost more than $800 billion borrowed,
not counting interest?

The tax finances Social Security and Medicare
and is divided between portions paid by employers and employees.

What happened to the debt limit?

How is the difference going to be made up?

Are Social Security and Medicare payments going to be reduced
by an equal amount?

Is this the same thing only different?

Obama said at the White House yesterday
that he’s interested in exploring with lawmakers from both parties
extending some of the stimulus measures that were part of the tax-cut package
“to make sure that we get this recovery up and running in a robust way.”

Does that mean borrowing to spend more?

Did Obama make a deal on the debt limit?

The people familiar with the discussions
wouldn’t characterize how seriously the idea is being considered
or whether it has moved beyond initial discussions.

Defensive pre-reason not to know anything about it?

Other ideas that have been discussed in the past -- and rejected,
according to some administration officials
-- include a temporary holiday on corporate taxes on repatriated foreign earnings.


Payrolls grew at the slowest pace in eight months in May...

...The jobs numbers followed a series of economic statistics
suggesting that the economy is decelerating.

Manufacturing grew at its slowest pace in more than in year in May...

...Consumer spending, which accounts for 70 percent of the economy,
rose less than forecast in April
as households felt the pinch of grocery and energy costs...

Federal Reserve Chairman Ben S. Bernanke
described the economic recovery as “uneven” and “frustratingly slow”...

“Until we see a sustained period of stronger job creation,
we cannot consider the recovery to be truly established,” Bernanke said.

Targeting the employer side of the payroll tax
could both attract Republican support and spur job growth,
said Christina Romer, who was the first head of Obama’s Council of Economic Advisers.

Isn't she a lobbyist now?

“A cut in the employer side of the payroll tax could absolutely help accelerate job creation,”
Romer said in an interview.
“In addition to the usual beneficial effect on demand,
this tax cut would make hiring less expensive.”

When national debts have once been accumulated to a certain degree,
[there has never been] a single instance of their having been fairly and completely paid.

The liberation of the public revenue...has always been brought about by bankruptcy,
though frequently by a pretended payment [through inflation].

Adam Smith
Moral philosopher and Father of Modern Economics


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