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Tuesday, December 07, 2010

Leonhardt: Obama's Back-Door Stimulus Plan

by Calculated Risk on 12/07/2010 11:50:00 PM

From David Leonhardt at the NY Times: For Obama, Tax Deal Is a Back-Door Stimulus Plan

Mr. Obama effectively traded tax cuts for the affluent, which Republicans were demanding, for a second stimulus bill that seemed improbable a few weeks ago. Mr. Obama yielded to Republicans on extending the high-end Bush tax cuts and on cutting the estate tax below its scheduled level. In exchange, Republicans agreed to extend unemployment benefits, cut payroll taxes and business taxes, and extend a grab bag of tax credits for college tuition and other items.
As a stimulus package, this is very poorly designed. It will help a little ... but at a very high cost.