Restitutor Orbis

The news continues to be filled with Republican attempts to discredit Obama's stimulus plan. They've even tried to claim that FDR's New Deal did not work, though it can be statistically proven. But facts never get in the way when you're an ideologue, and the Republicans have proven that they will not cooperate, will not compromise, and will not even try to work with Obama. They would rather see the country ruined than see a Democrat succeed. I hope Obama wakes up to this fact sooner rather than later.

Still, the stimulus package should pass both houses of Congress. There is enough support for it now that it's been watered down. Of course, the Republicans, having pretty much eliminated, or at least greatly reduced, the possibility that it will help, will then claim that it's Obama's fault and call for a change in Washington. I do not believe their tactic will work. They are discredited after eight years of Bush and it will take more than this to unseat Obama and the Democrat majorities in Congress.

Reuters reports that

Democratic leaders in the U.S. Senate and House of Representatives on Thursday wrapped up a last minute tax cut and spending details in the $789 billion economic stimulus bill, setting votes for Friday by both chambers.

The House is scheduled to vote Friday morning and the Senate plans to follow in the evening, but that vote could take a few hours to accommodate a Democratic senator who has to return home after the death of a family member.

Both chambers are expected to approve it which would meet a deadline set by President Barack Obama to approve the emergency spending and tax cut package before the end of the upcoming holiday weekend.

Another sign that Republicans will not work with Obama is that Senator Judd Gregg (R-NH) has withdrawn his nomination to be Commerce Secretary - he says because of disagreements over the stimulus plan. Disgusting, but not at all surprising. And three Republicans who voted for the plan have been vilified by their own party and a call has been made to unseat them.

Reuters also released a "Factbox" detailing the provisions of the stimulus package.

FOR WORKERS, CONSUMERS AND RETIREES

* A "making work pay" refundable tax credit championed by President Barack Obama of up to $400 per individual and $800 for couples in 2009 and 2010. It is calculated at a rate of 6.2 percent of earned income and is phased out for individuals with adjusted incomes over $75,000 and couples with incomes over $150,000.

* A one-time payment of $250 to Social Security beneficiaries, railroad retirees and veterans receiving benefits from the Veterans Affairs department. State government retirees not eligible for Social Security would also get the $250 payment.

* Increases the earned income tax credit for low-income workers with three or more children.

* Increases eligibility for the refundable child tax credit to more low-income workers. The bill reduces the income floor to $3,000 in 2009 and 2010 from the current floor of $8,500.

* Provides a new $2,500 tax credit for college education expenses. The credit phases out for individuals earning more than $80,000 and couples with incomes over $160,000.

* Provides an $8,000 tax credit for first-time home buyers for homes purchased between January 1 and December 1, 2009. The tax credit phases out for individuals earning more than $75,000 and couples earning more than $150,000.

* Provides temporary relief from the alternative minimum tax for millions of middle-class taxpayers who otherwise would be ensnared by the tax originally meant for the very wealthy.

The bill provides for $282 billion in tax cuts. This is far less than the Democrats wanted but much more than the country can bear. I'm worried. And I'm far from alone.

Sarah Robinson of Campaign for America's Future writes about the effect of the tax cuts so loved by Republicans. I agree with her 100%:

The past 20 years has taught us two hard new truths about tax cuts that conservatives have yet to internalize. The first one is: Tax cuts directed at the wealthy don't create new wealth. Larry Beinert has run the numbers that show that, going all the way back to the 1920s, economic growth correlates absolutely perfectly with high marginal tax rates on the rich. The higher the top tax bracket, the better the U.S economy does. This happens so reliably that we probably need to consider it a bit of settled economic wisdom.

The second truth is: What tax cuts do create—better than anything else you can name—is economic bubbles. It doesn't take long before you've got too many rich people with too much capital chasing too few real investment opportunities. When they can't find places to park their excess cash, they start gambling with it. In the 1630s, it was tulips. In the 1990s, it was dot-com stocks. In this decade, they turned to flipping houses and stashing it in hedge funds.

Of course, con men and scam artists (paging Bernie Madoff) thrive in the overheated, gravity-free, anything-goes casino atmosphere that follows. Worse, a whole lot of paper "wealth" gets created that doesn't have any real-world basis of value. Eventually, the bubble overinflates and pops, taking that phony "wealth" with it. And this happens every single time we cut taxes on the rich below the 50 percent threshold.

Tax breaks were one of the main reasons we got into this pit. More tax breaks will not get us out of it. And the conservatives need to let go of that shattered fantasy, and move on.