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    Filed at 6:46 pm under by dcobranchi

    I sincerely hope these are not trial balloons. Because if they are it will prove that the Bush Administration is just phoning it in and that the best we can hope for is that he doesn’t do any significant damage in the next 12 months:

    NEW YORK (CNNMoney.com) — Word is that President Bush may propose new measures to boost the economy by the time he gives his State of the Union address later this month.

    …Zandi thinks it might also make sense to make President Bush’s income tax cuts for the middle class permanent, a move that leading Democratic presidential candidates have indicated they’d support. Where they part company with the president, however, is in making those tax cuts permanent for high-income households, too. So if the president did push for an extension of his tax cuts for the middle class, that could undercut his stated goal of making his tax cuts permanent for everyone, Zandi said.

    Zandi would also advocate making the lower rates on capital gains and dividends permanent for everyone. Despite his belief that the federal government should not try to control the short-term performance of the economy, Edwards agrees that such a move could help stabilize the markets by giving investors more certainty about their investment tax bill. It also would reduce any pressure investors might feel to sell their holdings before the investment rate cuts expire.

    Making permanent the already implemented tax cuts would do absolutely nothing to stimulate the economy.


    Comment by
    Crimson Wife
    January 7th, 2008
    at 5:01 pm

    While I agree that tax relief should be focused more on the middle class and less on the wealthy, John Edwards has a pretty screwed up definition of what income level constitutes being wealthy. Where I live, what he calls “rich” wouldn’t even allow a family to purchase a median-priced house. I’d like to see him raise a family in the Bay Area while paying back the average educational debt of a law school (or MBA or MD) graduate on $200k/yr and then claim that’s “rich”.

    Comment by
    January 19th, 2008
    at 2:29 pm

    The underlying problem with the economy is an extreme maldistribution of income between the working class and the capital owners. When a CEO can make 300 million dollars while an average worker’s wages haven’t even kept pace with inflation what results is a dysfunctional market economy starved for consumption spending. The average American has had to fuel his/her spending with debt obtained by borrowing on the equity within their home – that phantom equity has now evaporated.

    In order to correct this out of balance condition there needs to be laws in place (similar to the anti-Trust legislation) that caps the annual income of all capital owners and their surrogates (CEOs, CFOs, etc.) at a specific federal percentage above that of the highest paid worker within their respective firm. Also, we need to eliminate labor arbitrage by canceling all Temporary Worker Visa programs (L-1, H1-B, etc.), and establish tax penalties for firms that expand their workforce above some threshold through outsourcing, or replacement hiring in foreign locations.

    Essentially, FDR was accurate when he characterized the Great Depression as an out-of-balance Economic malady. Rural income prior to the Great Depression was significantly lower than urban income, now (overvalued home equity) as then there was unlimited amounts of overvalued phantom equity flowing into the stock market, the income differential between labor and capital while nowhere near the current astronomical level was still much higher than sustainable. There in lies the root cause of the out-of-balance condition that precipitated the Great Depression. Any system including the market economy that gets to far out balance does not function properly. Certain constraints need to exist to keep the market economy from slipping into a dysfunctional state. Balance is the essence of stability nothing short of this will guarantee permanence.

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    January 28th, 2008
    at 1:11 am

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