Obama gets all supply-side and trickle-down on us!

How will Obama-bots, Obama-haters, and GOP politicians respond? The first two are (quite) predictable; the third will be interesting.

From the AP's Tom Raum (hat tip: C-J)...

In a speech today, Obama is expected to propose tax credits to business as part of a renewed effort to "stimulate" the economy.

It's difficult to know what motivates this-- from an increasingly sad/amusing attempt to pull levers and manipulate the economy to a shrewd political move to attract voter support and to potentially point to Republican hypocrisy and obstructionism.

The article reports that Obama has supported this for a long time. But given the timing (why did he wait this long if he's such a big fan?)-- both in the sense of being a few months before an election and in a time when Congress is unlikely to consider the proposals-- it seems more political than policy. But hey, that's what politicians do.

President Barack Obama's proposed tax breaks for business sound like ideas that have enjoyed broad Republican backing in the past. But in today's toxic political atmosphere, he's unlikely to get much-- if any-- GOP help. Still, his plans put Republicans on the spot, making it harder for them to say no to legislation they once embraced...

In a speech on Wednesday in Cleveland, Obama will ask Congress to let businesses quickly write off 100 percent of their spending on new plants and equipment through 2011....

Some supply-side stimulus (albeit narrow and short-term) and "trickle down" from President Obama. Interesting!

Obama had his economic advisers come up with a fresh set of proposals with job-creating potential. Among them: a $50 billion program to rebuild roads, railways and airports and to create a new infrastructure bank to oversee long-term projects. Legislation containing multiple public works projects has usually been popular in Congress across party lines.

Uh, yeah. Politicians (and voters) like it when other people pay most of the tab on their infrastructure projects! And then we forget (or like to pretend) that we're not picking up the tab for others. Unions like them too. Of course, national infrastructure should be paid for through national means, but state and local projects should be picked up by state or local.

The administration has not spelled out exactly how it would pay for all the new proposals, but suggested it would offset tax cuts by closing various corporate loopholes and levying targeted tax hikes on big business, particularly on the oil and gas industry and on multinational corporations. Some of these tax proposals were included in the budget Obama submitted to Congress earlier this year but were never acted on by Congress....

In other words, the tax hikes and loophole closings will not happen-- so, it would be paid for through debt. This is lame, but at least Obama didn't pledge to "cut government waste".

The proposed tax break for research and development has been around in one form or another since 1981 and in the past has drawn bipartisan support. However, Congress previously extended it just for short periods of time, usually just for one or two years, with frequent lapses that make it hard for businesses to plan. The credit most recently lapsed in 2009.

Right, it's a lot more fun (and profitable) to dangle a policy like this every few years as a carrot. It's not as good for the economy, but who cares about that?