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Galston on the Anemic Recovery

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Bill Galston has a very smart article up at the New Republic in which he argues that the reason the economic recovery is so anemic is not, as the Dems suggest, we need more stimulus nor, as the GOP suggests, that taxes are too high, but that in the past couple of decades, Americans became way, way too indebted and that instead of investing in the economy with new purchases, families are still busy paying down debt. Most of that debt is, of course, mortgage related. His conclusion: "I wonder what would happen if the financial wizards whose innovations helped crater the world economy turned their attention to devising a plan for reducing household debt to healthier levels without destabilizing systemically important lenders. One thing, though, is clear: Nothing of the sort will happen unless President Obama and Treasury Secretary Geithner set aside their incomprehensible passivity and fealty to the financial community’s cramped vision and get to work on the problem."

Michele Bachmann Gaining in Polls

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Quinnipiac now has Michele Bachmann solidly in second place in a new national poll with 14 percent of the vote, more than doubling her showing in their last poll. Mitt Romney still leads the pack with 25 percent.
The danger for Romney is, of course, that he is a thoroughly known quantity. People around the country are just getting to know Bachmann and she is telegenic and smart and charismatic. Look for her numbers to continue to rise. Additionally, the Quinnipiac poll has Sarah Palin in third with 12 percent of the vote and Rick Perry in fourth with ten percent. But, it is far from clear either Palin or Perry will decide to run, and it is far from certain their supporters would tend towards Romney.
Increasingly, it looks like Romney's best hope is that Palin or Perry does enter the race, splitting the anti-Romney vote. Otherwise, Romney is in for a tough road.

Ending the Hedge Fund Loophole

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How bad is the federal tax code? One loophole has gotten much deserved attention. Under current law, hedge fund managers classify their bonuses as capital gains and pay only taxes only at a 15 percent rate instead of the current highest personal income tax rate of 35 percent. (Yes, the bonuses are large enough to ensure that the managers are paying the highest rate.) Mind you, the bonuses are not a reward for their capital but for their work.
How much would be saved by closing this loophole? $20 billion over ten years. In fact, if you only closed the loophole for the top 25 hedge fund managers, would raise $4 billion in new revenue, the same amount of taxes collected from 441,000 middle class families.
$20 billion will not close the federal budget gap. But, it is shocking and worse than shocking - and immoral - to maintain such incongruous loopholes while gutting programs that help the poor.
(h/t Center for American Progress)

Mitch McConnell's Casuistry: & That's a Compliment

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Yesterday, Senate Minority Leader Mitch McConnell of Kentucky came up with a way to avoid the prospective government default should Congress and the White House prove unable to achieve a grand bargain on the budget. His proposal was immediately attacked by some fellow conservatives and this opens what is easily the most interesting divide within today’s Republican Party between the economic ideologues and big business Republicans.

Cong. Ryan on Catholic Social Teaching

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Congressman Paul Ryan, House Budget Chairman, has a post up at Our Sunday Visitor in which he explains how he understands Catholic social teaching and its applicability to the budget he has proposed.

He neglects to mention that the USCCB, which knows rather a lot about social programs, how they work, and whom they help, disagree with his proposed cuts.
Still, Ryan gets points for trying.

I just wish he would read a bit more deeply in the writings of another Ryan, Msgr. John A. Ryan, who is sort of the father of Catholic social teaching in the U.S.

Ryan, the Monsignor, understood the need for government to assist those who have been marginalized by our incredibly dynamic society. He also recognized that unrestrained capitalism was a great danger to the stability of society, which is why he advocated for the very programs that Ryan, the Congressman, is aiming to gut.

GOP Orthodoxy & Idolatry

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In yesterday’s New Republic, Ed Kilgore gave a brief overview of the ways that social conservatives, especially white evangelicals, have joined forces with secular conservatives to support their no-tax agenda. Kilgore’s article is fine so far as it goes and for a fuller explanation of the ways the Christian Right came to baptize laissez-faire economics, you are going to have to buy my biography of Jerry Falwell!

Bachmann - Tax Attorney Indeed

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As part of Michelle Bachmann's effort to present herself as a serious candidate for the presidency, when introducing herself she notes that she was once a tax litigation attorney. The idea is that in her anti-tax crusade, the subject is something she knows about. Visions of her battling the feds to protect average folk from the IRS leap to mind.
Alas, it turns out that, according to the Atlantic, Bachmann did not crusade against the IRS, she worked for the IRS.

I read the article and could not get a singular image out of my mind. When Dorothy and her companions get to Oz and ask to see the Wizard, they are refused until she announces that she is "Dorothy" and she is wearing the ruby slippers and the doorkeeper says, "Ah, well, that's a horse of a different color!"

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April 25-May 8, 2014

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