By John Melloy, Executive Producer, CNBC's Fast Money
Wall Street cheered President Obama's fiscal compromise with Republicans -- not just the extension of the existing Bush-era tax cuts, but the addition of a payroll tax cut in particular, as that measure may signal an even bigger shift on the part of the White House toward supply-side economics. "The payroll tax cut was a surprise to most and perhaps a sign that the administration is willing to try the other side's potion to get job growth back in the U.S.," said Bill O'Donnell and John Briggs, RBS bond strategists, in a note to clients. "There has been an endless debate among economists over the differences between private versus public sector multipliers. Looking at the just-announced tax compromise, it appears as if the markets will now get to see first hand what the debate's all about. The mid-term elections have apparently driven a shift away from public sector support (stimulus) to letting the private sector take a turn at the wheel with a heavier wallet."
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