Congressional Democrats, having apparently lost patience with the first Obama stimulus, are beating the drum for yet another round of government money to pump up the still-lagging economy. They need to take a deep breath. Lori Montgomery wrote a nice piece in yesterday’s Washington Post explaining why. Using some data from Mark Zandi at Economy.com, Lori reports that barely $100 billion of last winter’s nearly $800 billion stimulus has made its way into the economy. Until the rest is spent, why would we want to run up the debt by hundreds of billions more?

A long-simmering dispute over whether online retailers must collect sales taxes is boiling over again. Two Web retailing giants, Amazon.com and Overstock.com, are severing relationships with local businesses in states that are trying to force them to collect the levy, angering cash-strapped states and sending bloggers into an on-line frenzy. There are three things you should know about this squabble. 1. It has nothing whatever to do with ‘taxing the Internet.” 2. You owe the tax anyway. Amazon would make the paperwork easier for its customers by collecting the money at the time of sale, but whether it does so or not, you still have to pay. Not that many of us do, but that is another story. 3. According to one estimate, by 2012 state and local governments will be losing as much as $12 billion annually from uncollected taxes on online sales. There is real money at stake here.

The American public is deeply divided over whether to raise taxes to pay for health reform. A fascinating Kaiser Family Foundation review of recent survey data finds that in five polls taken over the past four months, about half of those questioned said they’d be willing to pay higher taxes as the price of reform. However, the amount of tax they are willing to pay appears to be low, they’d much prefer someone else pay, and they don’t like the idea of taxing employer-sponsored insurance one bit. Most striking, a dispiriting 60 percent think the system can be fixed without spending any more money at all—an outcome that no health economist I know thinks is remotely possible.

During the presidential campaign, Barack Obama and John McCain profoundly disagreed on many issues, among them climate change legislation and the tax treatment of health care. Now, President Obama seems to be bowing to one of McCain’s poor ideas while resisting one of his better proposals. It is funny how the politics of these issues is playing out. Many economists agree that McCain had the right idea on health care—the Arizona senator proposed replacing the current exclusion for employer-sponsored insurance with a generous tax credit. Yet, Obama continues to resist (though with increasingly less vigor) any change in the tax treatment of insurance.

There’s an interesting exchange on the climate change bill going on over at Capital Gains and Games. Budget wonk Stan Collander was impressed that “…the White House once again has demonstrated an excellent ability to get Congress to go along with the things it wants.” Dartmouth economist and former Bush CEA member Andrew Samwick, however, argues that this is backwards. He thinks the legislative branch should take the lead on developing legislation and the executive branch should take a subordinate role.

Bill Gale and Alan Auerbach are nice guys, but they sure know how to ruin a beautiful summer day. I’ve spent the morning reading through their latest long-term budget forecast. It’s not even Noon and I think I need a drink. Gale, who is TPC’s co-director, and Auerbach, who heads the Burch Center for Tax Policy and Public Finance at Berkeley, have done this exercise for the past few years--each iteration more depressing than the last. The story this year: Long after the economy recovers and returns to full employment, long after the TARP and the auto bailouts are history, the U.S. will face massive and unsustainable deficits. Don’t let anyone tell you this is a temporary problem that will fade with the recession. It isn’t and it won’t.