I have to admit,
I love reading this guy’s stuff (you should pick up one of his books). Here is
a link to his op-ed in Post this week that hits a few notes that resonate with
me.
First, he questions the
political decision and the practical policy implication of Obama’s full court
press on the Buffett Rule. Zakaria does
a full take down:
“Recently the president and his advisers have focused on
taxing the rich and tackling inequality. The “Buffett rule” tax on millionaires
has become Obama’s bumper sticker. The proposal is reasonable — but does not
deserve the attention Obama is showering on it. It raises a trivial sum, $47
billion over the next 10 years, during which period the federal government will
spend $45 trillion. It adds one more layer to a tax code that is already the
most complex and corrupt in the industrialized world. If the president wants to
be bold, he could propose comprehensive tax reform and eliminate the hundreds
of deductions, exemptions, credits and loopholes, many of which Congress sells
in exchange for campaign contributions.“
I would have gone further
and called the Buffett Rule a great way to turn meaningful debate over tax
policy into a cartoon punch line.
Zakaria was more polite than me, but he’s a paid professional. The idea of tax fairness is a political
winner; the idea that Warren Buffett needs to pay more is not.
Next, he makes the
compelling case that the American approach (Obama’s) to the global economic
crisis has been far superior to what the GOP has proposed, and he backs it up
with the evidence from Europe. Europe
followed the GOP proposed austerity approach with damaging results:
“We are four years into the financial crisis. In the United States,
the government acted speedily and massively to stimulate the economy, using
monetary and fiscal measures. In Europe,
governments quickly turned toward austerity programs, cutting spending across
the board to reduce budget deficits.
“The results are in: The U.S. economy is expected to grow 2
to 3 percent this year. The euro zone is expected
to contract 0.3 percent this year; Spain
and Britain
have officially entered a double-dip recession, the first time major economies
have done so in 40 years. The International
Monetary Fund’s latest forecast through 2017 predicts that the United States’
economy will outpace every major European one. IMF projections show that even Germany’s average growth rate will be only 40
percent of America’s.
European concerns about deficits and debt are valid. But
it was a mistake to use these medium- and long-term problems as a reason to
make massive spending cuts in the middle of the worst economic slowdown in 80
years. Government policy at its best is countercyclical: You cut in boom times
and spend during troughs. Europe is doing the opposite, and the effect is to
worsen budget deficits. In most European countries, spending cuts have led to
slower growth, lower tax revenue and thus bigger deficits. Spain and Britain are running deficits well
in excess of earlier projections.”
This one line bears
repeating, and the President should not back away from it:
“Government policy at its best is countercyclical: You
cut in boom times and spend during troughs.”
Investments in
infrastructure, education, and health care are smart uses of dollars. That message makes sense. Promoting populist, focus group tested
slogans like the Buffett Rule does not make sense. The dancing around the edges instead of
attacking the colossus that it the U.S. tax code does not make sense. This is the kind of simplistic messaging that
makes us all cynics and does not inspire hope that anything will change.
Zakaria closes with his take
on what the Buffett Rule should really be all about:
Warren Buffett has said that, in the midst of the
economic slowdown, his strategy was to invest in America. That’s the Buffett rule
Obama should follow.”
I agree.
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