What happens if this latest tax deal is passed, and then the economy turns around (as just about all pundits seem to think will happen)?
I ask this because it occurs to me that the Democrats had there shot at a stimulus plan that has failed (not that they’d admit to that). At least, I’d say that’s certainly the perception. So now, we cut taxes and the economy picks up. Doesn’t this give Republicans a real world argument about the efficacy of tax cuts versus spending as stimulus?
I’m sure that amongst Democrats, the answer will be obvious. But what will be the takeaway from the public at large? Will they look back and say “Hmmm, spending stimulus didn’t do anything, but low tax rates got things turned around!”? Are Democrats prepared to lose that argument empirically for a generation?
For myself, I think the economy is in a state such that there is a decent chance that tax cuts don’t work. But if they do, it seems to me the Democrats stand to lose some credibility on their purported economics chops. If that comes to pass, how ironic is it that it happens due to the efforts of a Democrat in the White House?