Tom Edsall has a nice piece up at The Huffington Post about the uselessness of about $24 billion in business tax breaks in the current House stimulus package. Most telling is the way Jason Furman, Larry Summers' top aide, poked holes in these provisions back in his civilian days:
Jason Furman argued -- before he became top deputy to Larry Summers on the White House National Economic Council --- that 2002 and 2003 attempts to spur the economy through accelerated depreciation of corporate investments, a process tax specialists call "bonus depreciation for business investment" or "partial expensing," was not "very effective in spurring economic activity."
That said, I guess I buy the political logic of devoting $25 billion of an $825 billion package (about 3 percent) to ensure its passage. As Edsall points out:
While questionable on economic grounds, the business tax breaks appear to be achieving as least some of their political goals. One crucial business organization, the National Association of Manufacturers (NAM), is generally supportive of the legislation, and strongly backs the corporate tax cuts.
"We think it's a positive development," said Dorothy Coleman, NAM Vice President for Taxation and domestic economic policy.
We should be so lucky if the difference between the platonic version of economic policymaking at Brookings and the real version in the White House is only 3 percent...