Obama Admits That Tax Cuts For The Rich Won’t Create Jobs

Dec 10 2010 Published by under Featured News

President Obama was on NPR’s Morning Edition Friday discussing the compromise on the Bush tax cuts when in response to a listener’s question about how keeping the tax cut for the rich will create jobs Obama said, “It doesn’t, which is why I was opposed to it — and I’m still opposed to it.” Obama admitted that he had to compromise because if he didn’t he felt that the economic recovery would be endangered.”

Here is the audio courtesy of Think Progress:

When asked about the role of the Bush tax cuts in terms of job creation Obama said, “It doesn’t, which is why I was opposed to it — and I’m still opposed to it. The issue here is not whether I think that the tax cuts for the wealthy are a good or smart thing to do. I’ve said repeatedly that I think they’re not a smart thing to do, particularly because we’ve got to borrow money, essentially, to pay for them.”

Obama framed the tax cuts as the first shot in a battle over the tax code, “The problem is, is that this is the single issue that the Republicans are willing to scotch the entire deal for. And in that circumstances — in that circumstance, we’ve got, basically, a very simple choice: Either I allow 2 million people who are currently getting unemployment insurance not to get it, either I allow the recovery that we’re on to be endangered or we make a compromise now, understanding that for the next two years this is going to be a central battle as part of a larger discussion about how do we reform our tax code so that it’s fair and how do we make sure that we actually are dealing with the deficit and debt in an intelligent way?”

Everyone who isn’t a blind right wing ideologue who isn’t in total denial of economic reality knows that extending the Bush tax cuts is not going to spur job creation. It is not logical to believe that keeping taxes at their current levels is going to have some sort of magical effect on job creation, but Republicans have long been believers in the dream of trickle down fairy dust. The myth of the magic of trickledown economics is a whimsical cover to story to hide the redistribution of wealth in this country from the bottom to the top. Trickledown economics is behind the Republican rationale for keeping the Bush tax cuts, and Obama is essentially saying that he made the choice to save the fragile economic recovery by giving the Republicans something that he knows is an expensive fool’s errand.

While the President’s consideration of those in the direst of need is commendable, it will not be easy for him to argue that these tax cuts are unnecessary now that he has agreed to extend them. If the economy starts humming along again, Republicans will ignore reality and give all the credit to the tax cuts. Democrats and Obama will give credit the stimulus and the traditional increase in government spending during a recession.

The point is that that this compromise likely will make Obama’s future battle with the Republicans on taxes and tax cuts even more difficult. The threat to the economic survival of two million Americans forced Obama to make this deal, but both he and the Republicans are gearing up for a total war on the issues of taxes, the tax code, and the deficit. While America is thinking short term, Obama is focusing on the long term big picture. A president’s time in office is so limited that long term thinking presidents are rare. It will be interesting to see if America will accept a president that has a long term strategy in this age of instant gratification politics.

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