The sad part is, as a stimulus, tax cuts are a great way to stimulate the Chinese economy.

Meanwhile our roads and bridges are disintegrating due to lack of investment.

Since tax cuts seem to cure most everything, I've often wondered why no one has suggested simply doing away with them entirely.

I understand the practical question about how we would fund things without taxes, but since no one in power has actually addressed that question and no one in the media has asked that question, I figure I don't have to deal with it either!

The Bush tax cuts were clearly not needed. The theory behind the Obama cuts is that if we aim them at the lower income households, they will spend the money, thus providing some fiscal stimulus. But a big portion of the Obama stimulus is going to be traditional fiscal stimulus, to fix roads/bridges, implement health IT, etc.

As we work out of this huge problem, we are going to be doing a number of things that are not sustainable long term......the deficit spending will be huge. It has to come down at some point. But you don't balance the budget during a recession.

Tax cuts seem like a very inefficient method of economic stimulation. The vast majority of the money will go to paying down credit cards, purchasing goods produced in China or Mexico (as Taylor pointed out) or just savings. These are all good things but not the stimulus that our economy needs and not worth sticking our kids with the bill.

But we can't go on this way indefinitely.

Agreed. However, I would like to propose some spending cuts along with those tax cuts and not have the powers that be stampede the public with scary false choices in order to raid the public coffers.

And YES, Republicans have failed miserably on cutting spending.

Sometimes it seems like Obama is an unbelievable political genius, the kind of natural leader that would be called a Mary Sue if an author created a character like him unironically. At other times, like today*, it seems like the most impressive, important thing Obama will ever do was simply getting elected (as a black man, an anti-stupid-war Democrat, a post-Boomer, and other stuff too) and the best of all possible worlds amounts to hoping he doesn't screw things up as quickly as a Republican would.

There's a lot of ways that this announcement could be an example of the first possibility. If the tax cut really winds up working as a stimulus and being targeted at people who need it. If it winds up as part of a package deal with a lot of progressive reforms. If the economy turns around before the end of his time in office, the budget generates a surplus, and that surplus is used to pay down some of the national debt.

Unfortunately, though, that's a lot of ifs. You never know, they could happen, but we have little reason to expect them except for wishful thinking.

* There's this, and there's also the Richardson news. Yeah, it probably has nothing to do with Obama, but even if it's totally innocent we know it'll be used for some annoying news over the next few days.

We're in a dangerous economic situation, arguably on the brink of a depression if we don't act boldly and quickly enough. Now is not the time to worry about what we can do "indefinitely." In the long run we're all dead, etc.

Ron makes a good observation. And read Krugman in todays NYT. He generally favors fiscal stimulus, but tax cuts are felt much quicker. Speed is what we need.

I'm deeply disappointed in the tax cut portion of the Obama plan as it is known so far. This is just more of Republican dogma, supposedly to gain Republican support in passing the bill. The money will be spent, if at all, on frivolous things. But the lesson is that in current terms, the money will go to pay down debt (80%, probably) - which in better times would be good since the citizens are over-indebted. But as a stimulus, savings are counter-productive, literally.

That money could have paid health insurance premiums for the uninsured, increased aid for college to reduce the debt on the folks who ultimately will have to pay for this generations excesses, or some concrete boost to the current economy.

Obama's choices for the key financial positions in the gov't are strong, but they are folks who have been involved in the "Bush/GOP way" for years, and this plan reflects that.

FAIL!

it seems like the most impressive, important thing Obama will ever do was simply getting elected...

A lot of why Obama was nominated was the Democrat and especially their left wing's propensity to place race issues above everything else...above national defense..above experience.

To those who voted for Obama in order to have an "historic moment", you will get what you deserve and that is an empty suit with no experience that speaks well.

He's not even sworn in yet and already the shine is wearing off.

And the beast's belly rumbles.

I have no problem whatsoever with tax cuts for the middle class. I think Josh Marshall gets to the heart of the problem with this, though -- since tax cuts are not a very effective form of stimulus, what this does is further reduce a stimulus package ALREADY on the low end of what is needed. For all the good to come out of this stimulus package, then, I'm skeptical of it accomplishing its top goal of actually rescuing the economy.

Furthermore, the legislative strategy Obama is pursuing doesn't seem to be a particularly sound one; but, I suppose, the proof will be in the pudding on that front. Again, though, I'm doubtful.

I agree with it, we have to find the real solution, not just to cut down tax.

Tax cuts were the center of Bush's economic policy when he ran amidst a massive surplus, then became his answer to the 2001 recession.

Cut down tax although is good, is it the final solution for downturn economy?

It's a case where reality neatly aligned itself with Obama's preexisting policy promises.