Probably Right About Both

clipped from tigerhawk.blogspot.com Today, Martin Felstein adds his considerably more authoritative voice to the outrage: The barrage of tax increases proposed in President Barack Obama's budget could, if enacted by Congress, kill any chance of an early and sustained recovery. Historians and economists who've studied the 1930s conclude that the tax increases passed during that decade derailed the recovery and slowed the decline in unemployment. That was true of the 1935 tax on corporate earnings and of the 1937 introduction of the payroll tax. Japan did the same destructive thing by raising its value-added tax rate in 1997. I increasingly wonder whether the Obama administration has persuaded itself that blame for the poor economy is so completely on the shoulders of George W. Bush that the public will not hold it responsible for the poor economy at any point. Or, perhaps, that the massive new largesse showered on American voters will protect the Democrats in forthcoming elections. Perhaps they are right about both.