I am with my friend Chuck Blahous on this one -- payroll tax cuts and continued extensions of them are just bad policy. Chuck cites seven reasons, all of them worth your consideration. If this story in the Washington Post is correct, then the breakthrough came when Republicans agreed to allow the payroll tax cuts to proceed without an offset, while the extended unemployment insurance and continued "doc fix" would be offset (in ways to be named later). When will we have a parade to celebrate?
We are now over four years into the downturn and weak recovery, and we are still engaged in short-term policy measures. These policies focus almost entirely on consumption and very little on investment, which drives the business cycle. Wrong in 2008. Wrong in 2009. Wrong in 2010. Wrong in 2011. Wrong in 2012.