Ed Morrissey at Hot Air has noticed a curious cognitive dissonance on the part of the congressional Democrats. While running against George W. Bush as the author of the current economic crisis, they are contemplating extending the Bush tax cuts.
In other words, the Democrats are going to try to say that Bush’s policies got us into this mess, and Bush’s policies are going to get us out. It’s a strange conundrum, but an almost inevitable one considering that, doing it the Democratic way, with massive spending and regulation, has only made matters worse.
“The Bush tax cuts sparked the last recovery and rebound from unemployment, which hit full throttle in 2004. Even before it had taken effect, though, unemployment never got out of the mid-6s. The investor class knew that Bush had structured his economic policies for growth rather than massive expansion of regulation and uncertainty.
“Allowing the tax cuts to expire would have the opposite effect, and even Democrats seem to realize that, albeit belatedly. Socking the middle class with a tax hike through inaction wouldn’t actually hit until well after the election, but it might turn 2012 into something very much like the midterms this year, whereas Democrats hope that anger will have receded by the presidential election. Even extending the middle-class tax cuts may not be enough to create any new jobs, though, as investors will simply avoid income-producing activities in the short run. That means no growth, no expansion, and no massive creation of jobs.”
President Obama is dead-set against the extension of the Bush tax cuts for high income earners, i.e. the sort of people who invest in the private sector and create jobs. But Obama is open to extending the tax cuts for the middle class.
The problem is that, if the Democrats consent to extending the Bush tax cuts, several unpleasant political things begin to happen. First, the liberal base, ever ready to soak the rich, raise taxes, and spend like sailors on meth, will be turned off, concluding that there is no difference between Republicans and Democrats. Second, Republicans can claim the Democrats have seen the light about the relationship between tax rates and economic growth. This will make resistance to further tax cuts, not to mention any resort to tax increases, all that much harder.
The ultimate result may be Republican majorities in Congress for a generation, with most of the Democrats becoming the “me too” party, just like many Republicans were in the 1950s-1970s. That is provided, of course, that the Republicans don’t get too domesticated to the wicked ways of Washington, as they were during Bush’s second term.
Of course the Democrats could dig in their heels and insist that the Bush tax cuts must go. But then they face the blame for turning the current recession into the Second Great Depression, and all that implies.
Source: How can Dems extend Bush tax cuts while running against Bush?, Ed Morrissey, Hot Air, August 30th, 2010