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How you can tell Karl Rove won

In all this talk about the bailout, how many times have you heard anybody serious in political circles say that we ought to be paying the bill for this with a tax hike on high incomes? Zero? Less than zero? Wouldn't a conversation about making sure those who benefitted the most from the runup and will benefit most from the bailout pay most of the bill happen in any adult country?

The guys who made all the money, then crashed the financial system, and will be getting bailed out are, actually, apparently set to get a tax break with the AMT and capital gains tax changes being proposed. That's just seriously regressive no matter how you slice it - we're apparently either going to pay for this via inflation or via general tax hikes on everybody.

My former cow-orker and I still trade predictions every week or two on whether we'll be seeing deflation or inflation as a result of all this, but now the rest of you get to share in my brilliance. I'm probably the last crackplogger in America to talk about the financial collapse. Yay!

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Well, in the debates Obama said that some spending plans would have to be postponed, but refused to say which ones, and McCain said he would freeze all non-military spending (pretty specific, but I don't think anyone believed him!).

Politicians, don't you just love 'em.

Seriously, though, I am appalled that the Dems are caving again to the Reps by decreasing taxes and loosening regulation in this bailout bill. Hopefully the Democrats will vote against it, but that would mean showing a backbone and I don't think they have one at this point.

And why is it that when deregulation fails, the Republican's believe that the only way to fix it is to deregulate even more?

While I sympathize with your frustration, raising taxes in the face of a recession would be an unwise thing to do from a macroeconomic perspective. The way to spur growth is through expansionary activities such as tax cuts, deficit spending, stimulus checks, revenue sharing with state and local governments, etc. At a time when credit is going to be harder to come by, it would be a really bad idea to draw out even more funds from the consumer economy through tax increases. Even Obama has said he may hold off on his upper-income tax increases given our current situation. We can save the score settling and budget balancing until after this recession is over.

While I sympathize with your frustration, raising taxes in the face of a recession would be an unwise thing to do from a macroeconomic perspective. The way to spur growth is through expansionary activities such as tax cuts, deficit spending, stimulus checks, revenue sharing with state and local governments, etc. At a time when credit is going to be harder to come by, it would be a really bad idea to draw out even more funds from the consumer economy through tax increases. Even Obama has said he may hold off on his upper-income tax increases given our current situation. We can save the score settling and budget balancing until after this recession is over.

That macroeconomic perspective usually assumes that the tax increases are broad - affecting the consumer economy. That's not what I advocated at all - I'm talking about a surtax on high incomes alone, on the assumption (correct, in my belief) that those people both benefited disproportionately from the run-up and will benefit disproportionately from the bailout.

Not talking about hitting Wal-Mart shoppers here (nor does Obama's tax regime in general); we're talking about people who received huge capital infusions that they weren't going to spend anyways.

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