Tuesday, September 30, 2008
Barry / Politics The Marsha Chronicles
Posted by Bruce Barry on Tue, Sep 30, 2008 at 11:26 AM
On the matter of U.S. House Republicans turning on the Wall Street bailout bill Monday, we get our daily dose of analytical sophistry from Tennessee’s own economic scholar-in-residence Marsha Blackburn, who buys into the dubious notion that we can solve the credit crisis by suspending part of the tax code. In a radio interview on WTN this morning, Blackburn pointed to taxpayer alarm over the prospect of a bailout that raises the federal debt limit to $11.3 trillion. I’m as alarmed as the next person, but Blackburn is delusional if she thinks we can solve a liquidity problem in credit markets in the short run by cutting taxes, spending and debt. But that’s her plan:
“Why don’t you reduce that debt limit and require every department to go in and make a 5-percent across-the-board cut. That’s 100 billion dollars…just by cutting out the waste. And then you come in and you say all right, cap gains suspension. We’ve got a liquidity issue. Suspending cap gains for a two-year period of time. Every economist that we have talked to, every small business owner that we have talked to, thinks that that deserves attention.”Shock of shocks—business owners think eliminating the capital gains tax would be swell! Economist Michael Ettlinger offers up several reasons why this is a loopy idea. It’s also a silly one politically: With quick action needed to restore market confidence, it makes minimal sense to suggest measures that have zero chance of passage during a campaign season. The plucky Blackburn sums it up: “We just gotta buckle down and get this taken care of.” (How hard is it to conjure up Tina Fey saying that?)
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