Did Paul Krugman Predict the Extension of the Bush Tax Cuts, 10 years Ago?

Nobel Prize winning economist, Paul Krugman, in his May 30, 2001 column for the New York Times, wrote (my emphases), “I delved further into the absurd piece of tax legislation that a House-Senate conference devised and that George W. Bush triumphantly signed last weekend. The Bush tax plan was always peculiar: in order to hide the true budget impact, its authors delayed many of the biggest tax cuts until late into the 10-year planning period; repeal of the estate tax, in particular, was put off to 2010.”
Krugman continued, “But even that left the books insufficiently cooked, so last week the conferees added a ”sunset” clause, officially causing the whole bill to expire, and tax rates to bounce back to 2000 levels, at the beginning of 2011.
Dr. Krugman explained, “In short, the tax bill is a joke. But if the administration has its way, the joke is on us. For the bill is absurd by design. The administration, knowing that its tax cut wouldn’t fit into any responsible budget, pushed through a bill that contains the things it wanted most — big tax cuts for the very, very rich — and used whatever accounting gimmicks it could find to make the overall budget impact seem smaller than it is.”
And now, here is the prediction:  “The idea is that when the absurdities become apparent … Congress will always respond with further tax cuts.
In the conclusion to his column, Krugman suggests, “How about a deal that fixes the A.M.T. and pays for the fix by returning tax rates on the top bracket to their 2000 level?”
Ten years later, it’s sure a shame that Paul Krugman is not a member of the Obama administration.
Here, below, is a delightful, light-hearted music video by Jonathan Mann, addressing that very thought.
For information about Paul Krugman, a link to his blog, and a link to a collection of his excellent columns, please see the Peace and Justice Online Directory of Resources.
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3 Responses to Did Paul Krugman Predict the Extension of the Bush Tax Cuts, 10 years Ago?

  1. Mary Beth Moore says:

    I am a regular reader of Krugman and have watched over the last 24 months how everything he said would happen (economically) has happened! I, too, wish he had been in Obama’s admin… I lament the tax cuts and can only hope that money for military spending will be cut to start paring the deficit.

    • Happihr says:

      Ever wonder how Paul Krugman knows this stuff and our leaders don’t?
      I have a difficult time believing our government officials don’t know what is going on.
      Ever wondered how Ted Kennedy could kill someone and hold his seat in the senate until death and the lady in Akron , Ohio is going to prison for 10yrs for using an alternate address so her children could get a better education? Murder Vs misuse of address. Yes, I would love my cheese cake now, before this ship sinks. Look how Obama was voted in, by Millions of Americans and Bammm same old song. And Justice for All. N.C wage for a waitress is $2 an hour in 2011. Clarence Thomas commits tax evasion what happens to he and his wife? Not one thing.

      • Happihr,
        Thanks for commenting on Mary Beth’s comment.
        My two cents: I think some in our government understand and care, but meet great resistance. I think some understand, but don’t care. I think some just don’t understand.
        As far as Kennedy, Akron, NC, and Clarence Thomas go- I won’t get into my thoughts on the particulars. Suffice it to say I think we progress as a society by recognizing the good things that I do believe are often accomplished, and working to achieve further improvements in our society. I agree that there is surely a lot that needs to be corrected, but I think that, with perseverance, work, and a little luck, we can overcome most of our nation’s shortcomings.
        Thanks again for commenting.
        -Bob for Peace and Justice Online

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