Now that President Obama has reach a "compromise" with the Republicans on tax cuts for the rich — which are even more generous to the ultra-wealthy than any George W. Bush passed — it's time for predictions.
Prediction 1 – Within 138 hours of passing these massive deficit-expanding tax cuts for the wealthy, Washington DC will once again be over run by "serious" people screaming about the looming deficit crisis and the need to make regular Americans' "share the sacrifice."
Prediction 2 – The deficit hysteria will lead Obama to embrace even more misguided policies like a pay freeze on federal employees that will counteract a large share of the stimulus effect of this deal.
Prediction 3 – President Obama has effectively endorsed an expensive "new normal" on the estate tax that is even more generous that what George W. Bush passed. It is unlikely to ever be raised. The result over the long term will be an even greater economic stratification and even more justification for the deficits hawks to lecture the middle class about how they must share the sacrifice so Paris Hilton can inherent an even larger family fortune.
Prediction 4 – The "payroll holiday" will be used as proof that Social Security is going bankrupt and needs "reform," i.e. cuts. In the long run it will undermine the social insurance contract. That this weird deficit spending is credited to the trust fund cut in the "Social Security payroll tax" — instead of a "tax credit" designed to do exactly the same thing — shows it is part of a long term attack on the Social Security program.
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