With gridlocked Washington unable to choose between the two great economists Keynes and Hayek, some leaders of both parties are attempting to come together in embracing the philosophy of another influential thinker: the immortal J. Wellington Wimpy. Wimpy, the rotund moocher who appeared for decades as a regular feature in “Popeye the Sailor” cartoons and comic books, became famous for his distinctive declaration: “I will gladly pay you Tuesday for a hamburger today!”
More recently, the President of the United States told a joint session of Congress: “I will gladly pay you a week from Monday for a $447 billion jobs bill today!” Amazingly enough, some Republicans, and nearly all members of his own party, seem prepared to go along with him.
Monday's dramatic revelation of President Obama's brilliant plan to pay for his priorities ("Tax the Rich—and then tax them some more!") did nothing to dethrone Wimpy as the administration's chief economic advisor. Even if he gets all the tax increases he seeks, they are projected to generate only $1.5 trillion over ten years—or just $150 billion a year –while the cost of his jobs bill would be $447 billion next year alone!
In a sorrowful display of Attention Deficit Hyperactivity Disorder, President Obama seems to have forgotten all about the great debate over exploding deficits that consumed official Washington for most of the summer. His big speech on jobs focused almost exclusively on spending, not cutting—with lavish new “investments” in high speed rail, school reconstruction, solar panels and the like. When it came to revenue, President Obama proposed slashing payroll taxes (to an extent that no Tea Party true believer would dare to propose) rather than raising revenue. The White House officially estimated that the President’s proposal to cut payroll tax rates in half (from last year’s 6.2% to next year’s 3.1%) would keep $240 billion out of the Treasury in 2012 alone. By contrast, his previous demand to terminate Bush tax cuts for “millionaires and billionaires” would raise revenue by a scant $70 billion a year—amounting to less than one third of the money he now proposes to give up in new tax cuts all his own.