An interesting ramification from yesterday’s news that President Obama will not seek to repeal the Bush tax cuts, and wait for them to expire at the end of 2010 — the justification for the policy shift is, “Officials determined that seeking to raise the taxes earlier during a recession was a bad idea.”
Many economists were saying they didn’t expect the recession to end this year, and that 2010 was looking pretty bad, too. I, among others, suspect that if the economy is still in the dumps in November 2010, the midterm elections will be awful for incumbents — and there are more Democratic incumbents than Republican ones.
Also, recall during Obama’s comment from during his prime-time press conference:
I don’t have a crystal ball, and as I’ve said, this is an unprecedented crisis. But my hope is that after a difficult year—and this year is going to be a difficult year—that businesses start investing again, they start making decisions that, you know, in fact there’s money to be made out there, customers or consumers start feeling that their jobs are stable and safe, and they start making purchases again. And if we get things right, then starting next year we can start seeing some significant improvement.
Looks like the Obama administration might be hoping for a better 2010, but they’re not expecting one.