Reply #2: Paul Krugman: Extending Bush Tax Cuts Will Decimate Social Security

[Demeter]

http://www.alternet.org/newsandviews/article/380219/paul_krugman%3A_extending_bush_tax_cuts_will_decimate_social_security/#paragraph8

I quote:

the only way to cut spending enough to pay for the Bush tax cuts in the long run would be to dismantle large parts of Social Security and Medicare.

That got my attention this morning. Krugman's a Nobel Laureate in economics, and I am not. He was right that the stimulus was too small, and that it would be hard to go back for a second bite at that Apple.

In my diary yesterday I expressed a willingness to accept a temporary extension of Bush tax cuts for the richest 2% if necessary to extend unemployment. Reading Krugman this morning convinces me that I was wrong on that point.

Let me offer a few more selections of Krugman's column this morning, Let's Not Make A Deal, both economic and political.

ful blackmailers, holding a clear upper hand. President Obama, they believe, wouldn’t dare preside over a broad tax increase while the economy is depressed. And they therefore believe that he will give in to their demands.

Bear in mind that Republicans want to make those tax cuts permanent. They might agree to a two- or three-year extension — but only because they believe that this would set up the conditions for a permanent extension later. And they may well be right: if tax-cut blackmail works now, why shouldn’t it work again later?

And for how long an extension - one year, two years, three years? Right now the Republicans hold the House. If an extension is for one year, how do we avoid making the extension, middle class and upper class, the major campaign issue in 2012? How does that help Obama or the Democrats hold the White House, the Senate, or have any chance to regain the House?

We cannot afford to make the cuts permanent, as the Republicans are trying to achieve. It is economic suicide:

We’re talking about almost $4 trillion in lost revenue just over the next decade; over the next 75 years, the revenue loss would be more than three times the entire projected Social Security shortfall.

Krugman, immediately before the words with which I began, tells us the cuts necessary would be savage....MORE

Krugman's column can be found at: http://www.nytimes.com/2010/12/06/opinion/06krugman.html?_r=2&ref=opinion