Much as I admire Krugman, Steiglitz, Baker and the other enlightened popular economists of our era, I am somewhat less whelmed than they seem to be by Kidglove's latest voodoo economics.
Their well-modulated approval of the president's plan for job creation may, as Krugman suggested, be the result of low expectations. The Princeton Nobelist called Obama's plan "bolder" than expected.
Although it's too little, and probably too late, the plan does at last acknowledge the Keynesian wisdom of increased government spending in times of both recession and high unemployment.
But too few voices of alarm have been raised about the real impact of one of the key points in the Kidglove Plan: cutting the "payroll tax" in half.
The White House is selling this as a "tax cut to the typical American family" amounting to about $1,500 a year.
What it really is, folks, is a back-door attack on your Social Security, Medicare, Medicaid, disability insurance and survivors' benefits.
The President, I think, wants American workers -- those lucky enough to still have jobs -- to think that he's cutting their income tax, as he and his predecessor have done for the really, really rich one per cent of us.
But FICA -- the Federal Insurance Contributions Act -- is less a tax than a mandatory investment in the health and welfare of all Americans, to be used when they're too old to work. Employers and employees contribute equally -- 6.2 per cent of payroll up to a fixed limit for employers, 6.2 per cent of salary up to a fixed limit for employees --through FICA to the Social Security Trust Fund. This is what pays retirement, health and disability benefits that all Americans enjoy.
The Kidglove voodoo jobs plan would get a substantial part of the money to "create jobs" by taking it away from workers when they reach retirement age. His fifty per cent cut in the "payroll tax" is actually a fifty per cent cut in funding for those worker benefits -- robbing from Peter what should be paid to Peter when he reaches retirement age.
The White House says this plan will put more money in American pockets, which presumably they will spend, which will stimulate the economy. But with the Baby Boomer generation just reaching retirement age, it effectively cuts in half the income to the Social Security Trust Fund.
Not to worry, sayeth the Voodoo Doctor Kidglove. We will make up the difference, as we did on the last "payroll tax holiday," from general revenues.
The same general revenues that are inadequate to pay for our ongoing wars, our ongoing government costs, our interest on trillions of dollars of debt? Those general revenues? The general revenues the Republicans refused to increase by raising taxes on the wealthiest among us, while at the same time declaring that our debt was of sufficient magnitude to threaten to bring down the government by forfeiting on its debt repayment?
Does Kidglove honestly believe that the Teapot Nuts in Congress will approve dipping into general revenues to keep Social Security solvent? The same Social Security Republicans have wanted to scuttle ever since the New Deal?
You can smell in the wind another political farce like the debt crisis fiasco. GOP fights Obama job plan. Obama cuts back on the only parts of it that will actually create new jobs (but only about a million in a country where well over 14 million able-bodied workers are jobless). GOP, in a great show of bipartisanship, says, "OK, now you can have your payroll tax cut." Smirk smirk.
Everyone in this cute little drama knows that in a year or so a new "crisis" will be declared: Social Security is "running out of money," they will shout in Congress. "We must end this failed Ponzi scheme right now!"
Lots of really, really rich folk will be chuckling all the way to the bank. Again.