Dave Weigel worries that they are:
Something is getting lost in the campaign: Why goad Republicans into supporting tax cuts? It's an irritating short-term strategy. What does it get Democrats in the long term if they say this tax cut can't be undone?I agree with Dave that Dems risk reinforcing a GOP talking point on tax cuts generally, but I don't agree that the policy has a small benefit. Here's what Dave said:
Bernstein calculates that keeping the tax cut would mean 8.6 percent unemployment by the end of 2012 and that nixing it would mean 8.9 percent.And I seem to remember other estimates putting the impact of the payroll tax holiday around half a percentage point of GDP growth. Neither of those, the impact on unemployment, or the impact on GDP, are small when faced with the prospect of another 5 or more years of Japanese style stagnation.
That doesn't mean there might be better way to stimulate the economy, as Dave notes (such as an actual stimulus bill). But that also doesn't mean that the payroll tax holiday doesn't have a significant impact, it does. (Though I'm obviously not mentioning the argument that the tax holiday is taking money away from Social Security, another GOP dream. So that should be considered as well.)
