I heard the clip on NPR. It almost sounded like Greenspan was saying we could be well on the way to a nice economic recovery next year if Bush/Congress/Republicans would forgo the tax cut. Pity for the Republicans next year that Rove and Delay won't get it.

NB:

I heard the same report on NPR, and I agree with you.

Question (and I'll be posting on this later tonight or tomorrow): If you were advising a Democratic candidate now (pick which one), would you be advocating your man to come out squarely against any additional cuts until basic needs were adequately funded? It sounds like an obvious question with an obvious answer, but I'm not sure what each candidate would do with that advice from their consultant.

Well it didn't seem quite that straightforward to me. "There are powerful reasons to suspect that the elimination of the double taxation of dividends and cuts in marginal rates will elevate long-term productivity," he said. So he essentially endorses the form of the GWB tax cuts. If the WH combined them with spending cuts, Unka Al would be on board -- and hasn't that been the whole idea all along - cut federal spending?

Marie:

That's just it. In order for Rove and Bush to get Uncle Al's blessing for this giveaway to rich seniors they would have to find $550-$750 billion of spending cuts in the year before the election.

And no matter how good Karl would be in spinning that, it would still be lethal for Bush to do so.

And according to what I heard from the testimony, Uncle Al made it sound like he wasn't enamored of a cut of $750 billion, $550 billion, or $350 billion. He just didn't think the Bush plan had the necessary stimulative effect to justify it.

That is why the GOP is ready to pivot off of the dividend tax cut in the next day or so and go with a capital gains tax cut instead.

Steve: I'd advise Dean to ignore it (unless it comes up during the debate--on the 3rd, is it?). The tax cuts, as I think you have explained here, have given the Republicans and Bush's Democratic supporters in Congress (including Dean's opponents Lieberman, Edwards, Kerry, and Gephardt) all the rope they need to hang. I hope they do. Dean's already made it clear that he would repeal the Bush tax cuts to advance his health care plans.

If I'm wrong about ignoring it, I agree that it's obvious Dean should come out squarely in favor of funding basic needs over more tax cuts for the wealthy.

Steve, you may be right. Unfortunately I keep seeing the same script play out over and over again with BushCo. They come out with an outrageous plan, the Dems meekly say this isn't going to fly, and GWB says I want it, some GOP "statesmen" question it, liberals hail the words of these "statesmen" as if this is proof that GWB has erred this time, then we move on to haggle, haggle and at the end of the day, all the GOP is on board and it is either exactly or very close to what GWB proposed. I am also too cynical to accept that GWB is reappointing Greenspan to another term without some sort of agreement from Greenspan and opposing a tax cut that GWB wants doesn't fit that schema for me.

Marie:

Point well taken. It seems pretty certain that the GOP will pivot to a capital gains tax cut today or tomorrow, which Greenspan would probably support more clearly than the dividend tax elimination.

It still gets back to the one issue at the end of the day: which of these schemes puts money in families pockets to spend, and which of these schemes leads to immediate hiring so that jobs can be created quickly. And frankly, I do not see where either the dividend tax giveaway or the capital gains tax cut do anything for the economy between now and next year at tax filing time.