Obama's economic populism

NYT: Obama’s Budget Plan Sweeps Away Reagan Ideas

The budget that President Obama proposed on Thursday is nothing less than an attempt to end a three-decade era of economic policy dominated by the ideas of Ronald Reagan and his supporters.

The Obama budget — a bold, even radical departure from recent history, wrapped in bureaucratic formality and statistical tables — would sharply raise taxes on the rich, beyond where Bill Clinton had raised them. It would reduce taxes for everyone else, to a lower point than they were under either Mr. Clinton or George W. Bush. And it would lay the groundwork for sweeping changes in health care and education, among other areas.

More than anything else, the proposals seek to reverse the rapid increase in economic inequality over the last 30 years. They do so first by rewriting the tax code and, over the longer term, by trying to solve some big causes of the middle-class income slowdown, like high medical costs and slowing educational gains.

...

Whatever happens, though, it has been a long time since any president has tried to use his budget to shape the government and the economy quite as much as Mr. Obama did on Thursday. On that score, he and President Reagan have something in common.

Certainly the problems of today are not the same problems as 1980, but Obama is going further than centrists hoped. His budget plan is much closer to an LBJ than a Clinton.

NYPost makes pies:



Politico has a piece on the winners and losers.

Andrew gets an email:

"A New Era Of Responsibility"

I see in Table 8.8 of the budget that the White House assumes real GDP growth of 3.2% in 2010, 4.0% in 2011, 4.6% in 2012 and 4.2% in 2013. I leave it to your imagination what the deficits would be if they had made more realistic assumptions.

Also: very nearly 50% of expenditure in 2010 will be financed by borrowing. I wonder what that number will be in 2011.

And gathers quotes from Krugman and Clive Crook

Here are some lefty takes via Yglesias:

1. Dan Weiss on the climate and energy elements.
2. Cindy Brown and Melissa Lazarín on education.
3. Larry Korb on defense.
4. Michael Ettlinger on the big picture.

It’s not Obama’s style to actually say this, but were this budget to be enacted it would be by far the most significant progressive step in over forty years.

Over forty years. That's LBJ land.

We needed a change from Bush, but judging from my armchair this kind of post-recovery domestic spending increase will be a burden on the economy.

I'm unsure what to think about the country's future now; my speculative crystal ball is murkier than ever. But it will at least be interesting. Obama isn't tinkering with the edges.

I don't know how much populist support this first term will gain him for 2012. It all depends on economic factors he can't control. But if this high post-recovery spending budget gets enacted I'm pretty sure he'll lose libertarian leaners. Baring something wondrous like a commitment to end the drug war I don't see much of a future for last year's liberaltarian alliance.

We'll go back to fusionism if Republicans nominate someone competent. We may even grit our teeth and vote Republican even if they have a Bush-Cheney-Palin-style person on the ticket, or we may protest with a third party. I dunno. I just know we won't vote for LBJ's Great Society 2.0