With the recovery in jeopardy, President Obama is considering a second economic stimulus that mixes tax cuts and a new nationwide infrastructure program. According to early reports, the second stimulus would cost $200 billion to $300 billion — half from tax cuts, half from spending. Some economists believe building roads and bridges will help most, but Republican support makes tax cuts far easier to pass. Is slashing taxes for small businesses and all Americans our best bet to avoid slipping back into recession? (Watch a Fox Business discussion about the need for a second stimulus)
A tax cut is the only way: The economy needs help, says David Leonhardt at The New York Times. Fifteen million Americans remain unemployed, and there's zero chance any big stimulus bill that focuses on spending will pass the Senate. The only realistic answer, then, is a tax cut — preferably one that creates jobs fast, such as a temporary payroll cut to reduce "the cost of employing people."
"Tax cuts that make a difference"
Cutting taxes won't save the economy: "Tax cuts are among the worst kind of stimulus you can design," says David Dayen at Firedoglake. What we really need is a "big infrastructure bill" that pays for neglected projects and puts people to work. A really huge tax cut might do a little good, but the only significant benefit for Obama and Democrats is that it would give Republicans what they want, so they'd have to explain why it didn't work.
"New jobs bill proposed"
The cuts are coming, one way or another: Whatever Obama does, "resurgent Republicans" will offer new tax cuts after November's midterms, says Martin Wolf in the Financial Times. They'll pretend it's not like the "reviled stimulus, though it is much the same thing." Then Obama will have to decide between vetoing the cuts and letting the GOP take credit any ensuing recovery. But that's the price he pays for settling for an original stimulus that was too small to do the job.
"Obama was too cautious in fearful times"