Another head-scratcher from Matt Yglesias. Obama did a really dumb thing recently, and Matt didn't seem to notice.
Yglesias writes: "CBO Chief Doug Elmendorf testified today before the Supercommittee and said, sensibly, that “[t]he combination of fiscal policies that would be most effective would be policies that cut taxes or increase spending in the near-term, but over the medium and longer-term move in the opposite direction.” In other words, the sort of thing that President Obama proposed in his jobs bill. Higher deficits in the short term when interest rates are low and the output gap is large, followed by lower deficits down the road when (hopefully) the situation will be different."
Except not. Obama is proposing covering that bill with a tax increase on the wealthy. It's as if he's saying "What's that? There's very little crowding out right now? Don't worry! I'll just crowd it out for you!". The reason for reintroducing the tax increase on the wealthy is obvious: it polls well. This turns what could have been a nudge of stimulus into primarily a redistribution scheme. Don't get me wrong - there are worse redistribution schemes out there than this one. But it's still not what we need.
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