Home > Main > Peter Orzag steals part of the TC rule, links unemployment rate to payroll taxes

Peter Orzag steals part of the TC rule, links unemployment rate to payroll taxes

July 4, 2011

You might know Peter Orzag from his last job as advisor to President Obama on the economy or his NYT Op-eds.

He’s a big shot, and apparently, he likes the TC rule.

Just a reminder, the TC rule is a rule that gives a suggested level of government spending, with the unemployment rate and inflation as the major inputs.  We linked the spending to the level of payroll taxes in a later post.

Peter Orzag came out with a quite similar idea in a Bloomberg editorial – a full week after we proposed it over here at the Traders Crucible:

But more than that, Congress should link the payroll tax to the unemployment rate. This would allow the tax holiday to automatically calibrate itself to existing conditions, providing support only when the economy is weak.

He wants to link the level of payroll taxes to the unemployment rate.   This is very, very similar to what the TC rule proposes.

The TC rule is a bit more comprehensive.  It takes into account inflation and population growth.  But let’s face it – the biggest driver of the TC rule is the unemployment rate.

Peter Orzag is getting some attention from around the blogosphere about his suggestion, from people like Brad Delong and Ezra Klien.  Perhaps they could send some love over to The Traders Crucible, just as a professional courtesy?

Categories: Main
  1. July 4, 2011 at 11:17 am

    They don’t believe in professional courtesy, Just grabbing credit.

  2. beowulf
    July 5, 2011 at 1:24 pm

    I now feel guilty about all the bad things I’ve said about Orszag. :o)

    Welcome back from California.

  3. beowulf
    July 5, 2011 at 1:34 pm

    OK OK, well good luck with your acting career. Hope you have time to keep blogging between auditions (hey that career track worked for Ben Stein). :o)

    • TC
      July 5, 2011 at 1:37 pm

      I’m starring opposite Kevin James in a buddy comedy.

    • Peter D
      July 5, 2011 at 9:29 pm

      “Now you have a chance to win money – FIAT money”… 🙂

  4. Y
    July 6, 2011 at 10:39 pm

    I think Keynes advocated this in the 1940s.

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