KausFiles

Is That All There Is?

The New Class of 2012–Young, gifted and … : Investigative tweeting reveals there’s been a gifting orgy underway for a month or two, as rich people rush take advantage of a $5 million tax free lifetime exemption that has been due to shrink to $1M in the new year. Whether or not the still-pending fiscal cliff preserves the $5 million limit, these gifts have been given and presumably won’t be given back.  That has to be sociologically significant: Lots of rich new young people who in previous generations would have had to wait many more decades to see that much money.  I predict more indie films. …

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How GOPs can go on offense–A non-libertarian strategy: Maybe Republicans have to accept much of what we call the welfare state–especially Medicare and Social Security. But that doesn’t mean they can’t go on offense when it comes to traditional “welfare” welfare–i.e. cash for the poor. Peter Cove–after defending the Work First philosophy that Obama’s welfare waivers were designed to underminesuggests how:

My experience with long-term welfare clients has led me to propose a radical solution: that we abolish all cash welfare, as well as food and housing assistance—except for the elderly and the physically and mentally disabled—in order to move from a dependency culture to one of work-first.  …

The federal government would use the huge savings from eliminating welfare to create or subsidize private-sector jobs, sending money to companies to reduce the cost of hiring and paying new workers. The government could also create programs similar to those run by the Depression-era Works Progress Administration, paying workers to build parks, refurbish bridges, clean streets, and so forth.

This is in effect a guaranteed job, a distinctly unlibertarian idea that many GOPs will run from–and that some Democrats might sign onto if interest groups (especially public employee unions, which don’t want to compete with WPA workers) would let them. It’s essentially what’s proposed in Chapter 8 here. I haven’t been pushing it very hard in part because Clinton’s 1996 welfare reform seemed to be having so much success reducing the footprint of the dole. But if Obama’s bureaucrats are going to try to reverse that progress, that maybe Cove’s strategy makes sense …

In a down economy, of course, the big-government part of the proposal (the publicly-funded jobs) becomes as important as the small-government part of the program (no more cash-like welfare).  …

P.S.: I assume Cove would keep unemployment insurance, as would I. Unlike welfare and food stamps–but like Social Security–it is a benefit “earned” by working.  …

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Is That All There Is?: Will Democrats be able to get more tax increases, after the current cliff-driven round? The debate between Douthat and Levin (no they won’t) and Noam Scheiber (yes they will) is now close to center stage, especially after Obama’s televised declaration that he’s going to want more tax “sacrifice” in the future. Nobody knows who’s right, of course. Scheiber argues that the” fiscal long-game mostly favors liberals” because Medicare and Social Security, two big deficit-drivers, will be so popular the “path of least resistance” will always be to pay for them, even though it “may not be economically desirable to let the welfare state hoover up a larger and larger portion of government spending and GDP.”

What Scheiber studiously ignores, it seems to me, is, yes, the third option–Dems can make their welfare state solvent not with higher taxes but by cutting benefits to the top chunk of the income scale. “Means-testing.” Bruce Bartlett will be disappointed. But is it really more popular to raise taxes than shave the Medicare subsidy for the rich? I’m skeptical. It’s this means-testing option that has made me reluctant to declare (much as I’d like to) that the Democratic domestic project is doomed because they can’t pay for what they’ve enacted–that the Beast, having been Stuffed, will collapse. There’s a relatively easy diet for the Beast that wouldn’t sacrifice much that should be important for Democrats.

P.S.: I note that Scheiber gives himself an out by sneaking in the notion that Democrats could succeed by “freeing up money from elsewhere” rather than by raising taxes. He seems to be thinking mainly of defense cuts. If he’s thinking of means-testing, then he shouldn’t denounce “the possibility that Obama will agree to Medicare cuts.”Why not, if the cuts are focuses on people who don’t need the benefits?  Go ahead, be a neoliberal! Even the liberal New New Republic will let you, at least once in a while, no?. …

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