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Economy

CNN Host Dismantles Grover Norquist’s Anti-Tax Argument: ‘This Is A Wish, Not A Plan’

CNN’s Fareed Zakaria challenged Grover Norquist’s opposition to tax increases during an interview on Sunday, insisting that the anti-tax zealot’s opposition to higher taxes — gospel which the GOP has adopted — could lead to financial collapse and turn the nation into “another Greece.” “In other words, I don’t like high taxes, but the question is if you want lots of government services, you have two options. You can either have high taxes, or you can borrow the money,” Zakaria said.

Norquist responded that Americans don’t want higher taxes and tried to argue that lawmakers can make-up for the lost revenue and still fund social programs and other government priorities with the “economic growth” that results from cutting tax rates. But Zarakai didn’t buy it. Pointing out that growth declined after President George W. Bush’s massive tax cuts and increased after President Bill Clinton raised them, he told Norquist, “This is a wish, not a plan”:

ZAKARIA: Are you telling me that you believe you can get all, you can close that gap entirely by cutting spending, that is by taking something on the range of 7% or 8% of GDP out of government spending? That is cutting $800 billion out of government spending every year?

NORQUIST: You do two things. You reduce spending, and you have stronger economic growth. This is one of the weakest recoveries we’ve had –

ZAKARIA: You can as a practical matter, this is a wish, not a plan. I would like stronger economic growth, too….This is all rhetoric, Grover. You’ve got a plan as a practical matter. As I said, Clinton raised taxes, he got growth. Bush had the biggest tax cuts in a generation, and he got the weakest growth in 30 years. All I’m saying is as a matter of practical planning for the fiscal future of the United States your answer can’t be, well we’ll have stronger growth. Yeah, if we grow at 6%, we don’t need to do anything. Everything is solvent, right? But I can’t wish for that. We’ve got to plan realistically.

Watch it:

Norquist ignored Zakaria and called on Congress to reduce the capital gains tax, corporate and individual rates, insisting that the policies will lead to the kind of economic growth that will off-set lost revenue. “All of the things I’m talking about, that you suggest is rhetoric, that’s not rhetoric, that’s the plan,” he explained.

But economic data just doesn’t back up Norquist’s claims. Analyzing data from the last three decades, the Center for American Progress’ Michael Ettlinger and Michael Linden found that investment, productivity, employment, and overall economic growth were all stronger during the 1990s, when America took a decade-long hiatus from supply-side economics, than they were in the 1980s and 2000s:

A growing number of Republicans may be waking up to this reality, and are distancing themselves from Norquist and his anti-tax pledge.

Climate Progress

September 22 News: Is America Prepared for a Cuban Deep Water Drilling Disaster?


Is the White House ready for a Cuban deep water drilling disaster?

The good news? Cuban energy officials are taking the lessons of the BP oil spill disaster very seriously, according to a group of oil drilling and environmental experts just back from Cuba, including the co-chairman of the Bipartisan National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling (also former EPA administrator), the head of the International Association of Drilling Contractors, a former senior executive for Royal Dutch Shell, and a longtime Cuba expert with the Environmental Defense Fund.

The bad news? Less than three months before deep water drilling begins in Cuban waters in the Gulf of Mexico, neither Congress nor the Obama administration has taken the necessary steps to help prevent or respond to a similar disaster that could impact even more US coastline. Granted, it seems a bit far-fetched to imagine the present Congress sending any legislation to the president these days, so the burden of preparedness essentially rests with the administration.

That’s got CNN’s Fareed Zakaria wondering, “What in the World?”

Read more

Yglesias

After Finance

sign.jpgI think Fareed Zakaria’s efforts to look on the bright side of the economic crisis probably go too far, but I certainly agree with this point:

The financial industry itself is likely to shrink, and that’s not a bad thing, either. It has ballooned dramatically in size. Curry points out that “30 percent of S&P 500 profits last year were earned by financial firms, and U.S. consumers were spending $800 billion more than they earned every year. As a result, most of our top math Ph.D.s were being pulled into nonproductive financial engineering instead of biotech research and fuel technology. Capital expenditures went into retail construction instead of critical infrastructure.” The crisis will stop the misallocation of human and financial resources and redirect them in more-productive ways. If some of the smart people now on Wall Street end up building better models of energy usage and efficiency, that would be a net gain for the economy.

Indeed. I mean, in principle taking a large proportion of quantitatively skilled people and having them apply their technical chops to the financial markets could be a good thing if doing so ushered in an exciting new era of genuinely superior financial wizardry. But instead, Keynes observation that “The game of professional investment is intolerably boring and over-exacting to anyone who is entirely exempt from the gambling instinct; whilst he who has it must pay to this propensity the appropriate toll” seems just as true today as it was two or eight decades ago. Meanwhile, smart scientists and engineers are still producing useful stuff.

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