From Thursday night’s Fox News All-Stars.
On which side won in the tax cut deal:
I think it’s a win for the president…He’s getting $1 trillion stimulus, a stimulus he could never have gotten a month after an election that was run on smaller government and less debt.
On the idea that because these are mostly tax extensions and mostly not the government’s money in the first place, they do not incur real costs to the government.
In that case, you can abolish all taxes and say it’s not a cost. Of course it’s a cost.
And the bond markets have spoken. Forget about what I’m arguing. On the day that the compromise was announced, which will increase the debt over the next two years by roughly $1 trillion, you had the largest drop in the price of bonds since the Lehman collapse in September of ‘08, meaning the markets are looking at this and saying: Here is the United States that supposedly on Election Day had a national consensus against expansion of government and debt, and supposedly a month later had a debt commission which had a lot of support for cutting our debt, and then all of a sudden, out of the blue, [the United States] announced an enormous stimulus that Republicans and Democrats are supporting — and the bonds dropped. That is a loss of confidence in the ability of America to control its debt.
On the wisdom of the McConnell-Obama compromise:
I would have let the Bush tax cuts continue for a short time until you get radical tax reform as advocated by the [presidential debt] commission. We would then have lower rates and eliminate loopholes.
But all the other stuff, two-thirds of that $1 trillion is outside of the Bush cuts and it is completely gratuitous…