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The Limbaugh compromise stimulus plan

Posted by Richard on January 27, 2009

The other day, President Obama explained to Congressional Republicans what he means by a bipartisan stimulus plan: the Republicans should acknowledge that he won and go along with whatever he wants. So much for the new inclusive politics.

Rush Limbaugh has proposed a real bipartisan compromise (link may work only a short time for non-subscribers). He noted that Keynesians think you can best stimulate the economy with lots of federal spending on "infrastructure," while supply-siders think the best way to stimulate the economy is tax cuts, putting more money in the hands of the people and businesses that create jobs. Both sides have many supporters, and he argues that a real bipartisan stimulus plan would give both sides a fair shake:

Mine is a genuine compromise.  So let's look at how the vote came out, shall we?  Fifty-three percent of voters in this country — we'll say, for the sake of this proposal, 53% of Americans — voted for Obama.  Forty-six percent voted for Senator McCain, and 1% voted for wackos.  Let's give the remaining 1% to President Obama, so let's say that 54% voted for President Obama and 46% voted for Senator McCain.  As a way to bring the country together and at the same time determine the most effective way to deal with recessions, under the Obama-Limbaugh Stimulus Plan of 2009, $540 billion of the one trillion will be spent on infrastructure as defined by President Obama and the Democrats.  The remaining $460 billion, or 46% that voted for Senator McCain, will be directed towards tax cuts, as determined by me.  

These tax cuts will consist primarily of capital gains tax cuts and corporate tax rate cuts.  So Obama gets $540 billion to spend his way.  The other people of this country who did not vote for his way get $460 billion spent the way they would like it spent.  This is bipartisanship! This is how bipartisanship really works.  Okay, Obama wins by a 54-46 majority, so he gets 54% of the trillion bucks.  Spend it his way.  We get 46% of the trillion bucks to spend our way, and then we compare. Then we see which stimulus actually works and works the fastest, and I will guarantee you that if this plan is adopted, just the announcement that $460 billion will go toward paying for tax cuts, capital gains, and corporate tax rates — we could throw in some personal income tax rate reduction in order to make sure that the voters don't think it's all about helping the big guys.  But we need jobs, do we not?  

Who hires people?  Businesses!  Businesses need tax cuts.  The US corporate tax rate is obscene.  It is the highest of all industrialized nations.  It's 35%.  Cut it.  Cut it in half.  Make the capital gains rate go away for three months, and then get out of the way to see what happens on Wall Street.  And once Wall Street starts ticking up 500 points a day, you watch what happens to the rest of the private sector.  It will follow right along.  This would ensure a bipartisan compromise bill, as Democrats have said that they're always about. It would satisfy the American people's wishes, as polls currently note; and it would also serve as a test, going forward, as to which approach best stimulates the growth of jobs — and it can be measured side by side.  It could be determined where the new jobs are coming from

If Congress has got to pass a massive stimulus bill, I'd rather see this than the steaming pile of pork (much of it to be spent 2, 3, 4 years down the road) they're currently putting together. Although I'd rather see a long-term capital gains cut than a short suspension.

Of course, the Limbaugh plan has zero chance of even being considered. The Republicans are too gutless and disorganized to embrace and promote it. The Democrats won't even listen to anything with Rush's name on it. And I suspect many of them know he's right about which will be shown to produce more jobs, and they can't afford to fail that test.

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