“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.
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Paul Krugman: Fighting Fiscal Phantoms
These are difficult times for the deficit scolds who have dominated policy discussion for almost three years. One could almost feel sorry for them, if it weren’t for their role in diverting attention from the ongoing problem of inadequate recovery, and thereby helping to perpetuate catastrophically high unemployment.
What has changed? For one thing, the crisis they predicted keeps not happening. Far from fleeing U.S. debt, investors have continued to pile in, driving interest rates to historical lows. Beyond that, suddenly the clear and present danger to the American economy isn’t that we’ll fail to reduce the deficit enough; it is, instead, that we’ll reduce the deficit too much. For that’s what the “fiscal cliff” – better described as the austerity bomb – is all about: the tax hikes and spending cuts scheduled to kick in at the end of this year are precisely not what we want to see happen in a still-depressed economy.
New York Times Editorial: Close Guantánamo Prison
Civil liberties, human rights and religious groups are now urging Mr. Obama to veto the military authorization bill for the 2013 fiscal year if it contains any language that denies the executive branch the authority to transfer Guantánamo detainees for repatriation or settlement in foreign countries or for prosecution in a federal criminal court.
They make a powerful case. Because of the existing restrictions, including an onerous requirement for certification of detainee transfers by the secretary of defense, no detainee identified for release by the task force has been certified for transfer overseas or to the United States in nearly two years. At that rate, the chance of emptying Guantánamo before the end of even a second term is zero.
Vetoing a military budget bill is no small matter, although other recent presidents have done it. Neither is making dozens of long-serving detainees wait even longer in limbo for no good reason, preserving a recruiting tool for America’s enemies.
As President Obama gets closer to making his deal with the Republicans on the budget, the most important thing to keep in mind is that the fiscal cliff is an artificially contrived trap. Were it not for the two Bush wars and the two Bush tax cuts and the House Republican games of brinksmanship with the routine extension of the debt ceiling, there would be no “fiscal cliff.”
Rather, there would be a normal, relatively short-term increase in the deficit resulting from a deep recession and the drop in government revenues that it produces. When the economy recovered, the deficit would return to sustainable levels. In the meantime, these deficits are necessary and useful to maintain public spending as a tonic to the economy.
In addition, there are two entirely extraneous questions that do not belong in this debate — whether Social Security requires any long-term adjustment to assure its solvency, and if so, what kind; and how to restrain the long-term growth in Medicare spending.
Warren E. Buffett: A Minimum Tax for the Wealthy
SUPPOSE that an investor you admire and trust comes to you with an investment idea. “This is a good one,” he says enthusiastically. “I’m in it, and I think you should be, too.”
Would your reply possibly be this? “Well, it all depends on what my tax rate will be on the gain you’re saying we’re going to make. If the taxes are too high, I would rather leave the money in my savings account, earning a quarter of 1 percent.” Only in Grover Norquist’s imagination does such a response exist.
Between 1951 and 1954, when the capital gains rate was 25 percent and marginal rates on dividends reached 91 percent in extreme cases, I sold securities and did pretty well. In the years from 1956 to 1969, the top marginal rate fell modestly, but was still a lofty 70 percent – and the tax rate on capital gains inched up to 27.5 percent. I was managing funds for investors then. Never did anyone mention taxes as a reason to forgo an investment opportunity that I offered.
Leslie Savan: The $250,000 Question: Poll Shows Obama’s Tax Plan Is Widely Misunderstood
For the last four years, President Obama has been pushing his plan to raise tax rates on people’s income over $250,000, but a new poll indicates that most people still don’t understand one of the plan’s most basic concepts. [..]
Here’s the Obama plan in brief. The Bush tax cuts would be extended for households with an annual income under $250,000 (or $200,000 for individuals), but the tax cuts would expire on any income above $250,000. That means, for example, if you make $300,000, your tax rate would rise a few percentage points, to the Clinton-era rates, but only on the portion above $250,000; in this case, only on $50,000. Bottom line: no one-not a billionaire, not someone making $251,000-would have to pay more taxes on that first $250,000.
There’s a widespread misconception, however, and it’s causing a lot of unnecessary fear. It’s the faulty belief that if your income is above $250,000, you’d have to pay the higher rates on all your income, as if you were suddenly being moved entirely into a higher tax bracket. That is wrong.
Benjamin Strauss and Robert Kopp: Rising Seas, Vanishing Coastlines
The oceans have risen and fallen throughout Earth’s history, following the planet’s natural temperature cycles. Twenty thousand years ago, what is now New York City was at the edge of a giant ice sheet, and the sea was roughly 400 feet lower. But as the last ice age thawed, the sea rose to where it is today.
Now we are in a new warming phase, and the oceans are rising again after thousands of years of stability. As scientists who study sea level change and storm surge, we fear that Hurricane Sandy gave only a modest preview of the dangers to come, as we continue to power our global economy by burning fuels that pollute the air with heat-trapping gases.
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