I'm not an economist, but I'm not too ecstatic about the recent tax deal. To me, it signals a mistaken worldview. I fear that it is going to increase the deficit without stimulating the economy. I don't know why Obama would violate his own campaign promise to tax the rich, it does seem like a Bush 41 "Read my lips" betrayal, and if I were a liberal Democrat, I'd begin mounting my challenge to Obama. Yes, it would help the Republicans, but so do tax giveways to your political opponents. Now, Obama will start off the new session on the wrong foot, having alienated his political base. I don't get it, myself.
Plus, it seems to my non-economist mind that extension of unemployement benefits is not the best foundation for growth. Talk about the return of the "welfare state."
I don't like the way this deal was done, and don't like the result.
Of course, I hope I'm wrong, and that a year from now unemployment is below 10 percent--but I don't see any way this could lead to that.
The US is suffering because we are losing two wars--one in Iraq, the other in Afghanistan. The evidence is that both countries sided with China in the recent Nobel Peace Prize controversy, boycotting the presentation to Liu Xiaobo. If we had won those wars, they'd be on our side rather than China's, IMHO.
Economic decline is a symptom of political and military decline. Only military victory could reverse that--but it would require a reorientation of American policy away from "Great Game" to "Clash of Civilizations" mode, full partnership with Russia and China, confrontation with Muslim extremism, and crash re-industrialization of the American economy.
Easier for Congress and the White House to take the drugs of tax-cuts and unemployment insurance instead, apparently hoping it might work...for the short-term.
