Pawlenty’s Plan

Bruce Barlett eviscerates Tim Pawlenty’s absurd economic plan:

The usual right-wingers like Larry Kudlow and the Wall Street Journal’s editorial page are falling all over themselves to praise Tim Pawlenty for his “plan” to double the real rate of economic growth from its historical level of about 2.5% per year to 5% for 10 years. I don’t want to waste much time on such an idiotic idea — as I told a reporter, if he could actually do this he deserves not only the presidency, but the Nobel Prize in economics. The truth is that there is no substance whatsoever to Pawlenty’s plan except to essentially abolish taxation for the wealthy. And doubling the growth rate is just childish wishful thinking. If there were any policies that could bring this about, every country everywhere would already be doing it.

Two points I haven’t seen mentioned elsewhere: (1) According to the OECD, no county in its database has ever achieved 10 continuous years of +5% growth except Korea; a few had compounded growth rates above 5% annually for 10 year periods, but none have done so for many years and the U.S. has never done so in its history. (2) The U.S. has only once in its history gone 10 years without a recession — the George H.W. Bush/Bill Clinton expansion that ran exactly 10 years from March 1991 to March 2001; the average postwar expansion only lasted 5 years.

Point 2a that Bartlett fails to mention is that there were tax increases immediately prior to this record expansion.  But hey, if your the Wall Street Journal editorial page– the supposed intellectuals of the Republican party– this is all good.

The 100% inheritance tax

Professional contrarian Megan McArdle makes the case– and its a pretty good one– for a 100% inheritance tax:

To wit: the living person was entitled to dispose of their assets, but they are no longer living, and are not entitled to anything except an undisturbed grave.  Since they are out of the picture, we must look to the heirs.

Do they deserve to inherit?  By virtue of what? Being born?  Having parents?  Maybe they put up with their parents, and their parents were difficult, even terrible.  But if the parents wanted to pay someone to put up with them, they could have done so when they were alive.  And no matter how awful your parents were, “putting up with them” doesn’t seem so terrible that it should entitle you to all their stuff, tax free.  Even if your mom is Joan Crawford, I can pretty much guarantee that foster care or institutionalization would have been worse.  Why not give the stuff to those kids?  Because they were unlucky enough to be forced to endure their abuse from poor people?

Inheritance not only hands people valuable income in return for something we don’t really want to further reward–being born lucky–but also, in doing so, it entrenches the least attractive feature of our economy: the fact that people who are born to affluent parents are much more likely to themselves be affluent than children born to the less well-heeled.  Lack of economic mobility is generally regarded as a bad thing that we should combat.

There’s much more and she talks about what sort of exemptions we’d want, the possible implications, etc.  It’s never going to happen, but I found it a really interesting thought exercise.   Especially, since I think that as a society we way underappreciate the lack of social mobility and how much of our life’s successes and failures are tied into the accidents of our birth.

Milbank!

Read that with the following inflection:

Milbank really frustrates me because he can be a smart and funny political observer, but, oh is he so Mr. Conventional Wisdom.  I clicked on this story because the link on the homepage suggested Austin Goolsbee was the only thing preventing Obama from “panic.”  Seriously?  Obama is many things– panicky is not among them.  To Milbank’s credit, the panic line was not explicit nor implicit in his column.  That said, it is an absolutely perfect example of “the left is wrong, the right is wrong, the answer must be somewhere in the middle” thinking.  This bit is what really got me:

But when he brought his family from Chicago to Washington two and a half years ago and joined the Obama administration, he found a culture based on ancient superstitions: liberals who think the government holds all the answers, and conservatives who adhere to a religious belief that all ills can be cured by dramatic cuts in government spending and taxes. Goolsbee is a voice of reason in a town that resists common sense.

No, no, no!  Liberals do not think government holds all the answers.  Liberals think that sometimes government holds the answers and sometimes the private sectors does, and more often than not it is the right combination of the two that holds the answers.  You know, nuance, situational complexity, ends over means, etc.  Now on the Republican side of things, this really is pretty much true.  If you don’t think so, just check out Tim Pawlenty’s laughable economic plan.

Rant of the day (graduation inflation edition)

An email from a co-author today referred to the “graduation inflation” in reference to attending his son’s pre-school graduation this morning.  Perfect term for a trend that’s been really bugging me as all over facebook lately, my friends have been attending pre-school, kindergarten, 5th grade, 6th grade, and 8th grade “graduations.”  David actually had a ceremony for end of 5th grade (end of elementary here) today, but they didn’t push the “graduation” angle too hard.  I’m sorry, it’s not a graduation unless you leave with a diploma or degree in hand.  You know more “graduate” from 8th grade than you do from 4th grade.  You finish and move on to high school.  That’s it.  Is it worthy of some commemoration?  Sure, that’s totally reasonable, but please stop calling it graduation.  Also, be proud of your kid because they’re a good kid, they worked hard, whatever, but don’t be “proud” because they finished 8th grade.  Accomplishing something 99.9% of other upper-middle class white kids do is really not very special.  End rant.

Chart of the day (cutting the deficit)

Via Ezra:

1)  Americans are really  for sticking it to rich people with taxes (including raising the cap on income taxable for Social Security).  Even half of Republicans support these tax increases.

1a) Support for these positions among Republican members of Congress?  0%

2) Americans don’t actually want to cut anything but foreign aid, and that’s only <1% of the budget.  Though, looks like Americans are plenty open to military cuts, too.

3) Americans like to say that they are conservative, but how in the world do all those numbers in red add up to us being a “conservative nation”?  Again, even 43% or Republicans oppose cutting assistance to “lower income Americans” (though I bet the support would be less for “poor people”).