Geronimo!

From

Over the Cliff, Spending Cuts Loom

Sunday, December 30, 2012 As of 10:39 AM EST
By Damian Paletta

WASHINGTON—During one of the presidential debates in October, President Barack Obama responded bluntly to a question about looming spending cuts by saying they “will not happen.”

Now, with a deadline for action imminent, it appears the cuts could most certainly happen, at least temporarily.

In the mad scramble by political leaders to avoid the so-called fiscal cliff, Congress and the White House are focusing most of their attention on preventing tax rates from increasing on most workers, extending emergency unemployment benefits to roughly two million Americans and on preventing deep cuts in Medicare payments to doctors.

But another high priority, which appears thornier to resolve, is the $110 billion in annual spending cuts that were put in place last year and are set to begin on Jan. 2, 2013, and continue for eight more years.

More at the link.

The Budget Control Act of 2011 was the compromise between President Obama and the Republicans, in which the Republicans agreed to yet another increase in the debt ceiling in exchange for $2.1 trillion in spending cuts over ten years. The President’s statement that the spending cuts “will not happen” demonstrate just how honest he was in the whole deal; he had not the slightest intention of anything other than cosmetic spending cuts.

And now, with the so-called fiscal cliff looming, the Democrats and Republican leadership in Congress is trying desperately to avoid going over that cliff, and only the steadfastness of the Republicans in the House has kept Speaker John Boehner from selling out the whole show. The politicians might just get weak-kneed, worrying about what the public will think, worrying about the next election, but if the parties compromise in the fashion that is talked about, then the Republicans surrendered on the debt ceiling — which we have almost reached yet again — for not one damned dime in spending cuts.

The Republicans hoped that last month’s elections would have ended the Obama presidency, and that they’d be dealing with someone who had some actual sense in the White House come January 20th, but it didn’t work out that way. So we’re stuck with a President who wants to increase taxes, but only on the top producers, which would yield a revenue increase of less than 20% of the budget deficit, and doesn’t want to cut spending at all. Giving in to the President’s plans would yield a deficit twice as large as the largest one under President Bush, and add nearly another trillion dollars to the national debt, in just one year. The 11th hour deal being discussed right now won’t help much, either:

Fiscal Deal Would Do Little To Shrink U.S. Deficit

Updated December 29, 2012, 4:28 p.m. ET
By Damian Paletta

WASHINGTON—The last-minute tax and spending deal being discussed in the Senate would do little to reduce the deficit, and could actually expand it, leaving difficult choices about Medicare, Social Security, and the country’s borrowing limit until next year.

Much more at the link, but the first paragraph tells you all that you really need to know: any agreement to avoid the fiscal cliff is simply going to kick the problem down the road for another year. This is a problem we cannot ignore, but ignoring it is exactly what the government is dickering out how to do! The Republicans want a little something to try to save face, but they aren’t going to actually deal with the problem, and the Democrats don’t even care about the problem. The Democrats can’t care: they built their winning electoral coalition on the concept of retaining lower tax rates for everybody except the most productive Americans, and on maintaining high levels of government spending. To do something actually responsible would require the Democrats to abandon their electoral coalition.

Karen wrote, a couple of days ago:

Marc Thiessen argues in his latest Washington Post piece that conservatives should let us go over the fiscal cliff, so the people will finally be forced to pay for the government they voted for.

Barring a last-minute breakthrough, taxes will go up for every American taxpayer on Jan. 1 — and that’s a development conservatives should welcome.

Don’t get me wrong, it would be better not to raise taxes on anyone, pursue pro-growth tax reform and cut the size of government instead. But that’s not what the American people voted to do last month. Americans cast their ballots for big government.

Now it’s time to pay for it.

Until now, the growth of government under President Obama has not hit the pocketbooks of most Americans. During Obama’s first term, federal spending grew to more than 24 percent of GDP — the highest it has been since 1946. Yet almost no one in the country (except smokers and those who frequent indoor tanning salons) saw their taxes rise. Quite the opposite: 160 million Americans saw their payroll taxes reduced from 6.2 to 4.2 percent.

How can we expect people to care about the growth of government if it doesn’t cost them anything?

Read the whole thing. I can’t say I disagree. People are clueless about how much this government they’ve given us is costing. If it hits them all in the wallet maybe they’ll wake up and see the light. Unfortunately, those of us who didn’t vote for this will also be forced to pay the price, but we will be paying for it one way or the other. May as well get it over with so there’s a chance to possibly preserve something for future generations, who had absolutely no say in what we’re doing to them.

I’ve said it many times in the past: the budget should be cut, and I mean cut to the bone, to balance the budget, and that taxes were already high enough. The problem is that we spend too much money, way too much money. But, if taxes have to be increased, they should be increased on everybody, and going over the fiscal cliff both increases taxes on everybody and cuts spending, albeit not enough.

The Democrats, knowing that the Republicans want to protect Defense spending, are trying a scare tactic. Again, from THE WALL STREET JOURNAL:

Pentagon Readying 800,000 for Rolling Layoffs

Updated December 30, 2012, 2:19 p.m. ET
By Dion Nissenbaum and Damian Paletta

WASHINGTON—The Pentagon is preparing to notify its entire civilian workforce to prepare for furloughs if Congress and President Barack Obama are unable to reach a deal before Jan. 2 to avert automatic spending cuts.

A senior defense official said Sunday that the Pentagon would notify 800,000 civilian workers to brace for furloughs in the new year, meaning the workers would be ordered to take mandatory leave without pay for a certain period. The warning is much gloomier than the agency recently offered employees, as it had said there wouldn’t be an immediate impact on personnel or operations if a deal wasn’t reached by January.

But the senior official said that notices would go out soon after sequestration took effect. The official didn’t know when the first layoffs would take place, but said they weren’t likely to happen immediately.

More at the link.

Guess what? Your Editor does not have a problem with that, not in the slightest! He would rather see other parts of government cut, but cutting somewhere has to be done. The biggest problem with the sequestration provisions of the Budget Control Act is that they are too small!

So, let’s go off that cliff! That would mean that Yorkshire’s taxes would go up, that Eric’s taxes would go up, that Hoagie’s taxes would go up, that Wagonwheel’s taxes would go up, and that my taxes would go up. It might even mean that the Phoenician’s taxes would go up, as New Zealand would have to pay for more of its own defense burden.

Then, as Karen noted, when people see that the huge government for which they just voted started to take a bigger chunk out of their paychecks, maybe they’ll wise up and not vote for ever-more government spending.

9 Comments

  1. I agree with your assessment. We do not have a revenue problem. Until spending is addressed in a real and meaningful manner, I am unwilling for taxes to be raised on anyone. We can not continue ignoring the amount of money we are spending and expect anything to change.

  2. The occupier of 1600 PA Ave., NW, Washington, Disease 20001 likes to use his narcissistic pontificating it’a all the Republicans’ fault. Actually he’s been doing it since 1/20/09. Now this little article saying Hairy Reed is unable to make a counteroffer. Looks like BO’s favorite whipping boy made an offer, and the Dems give their favorite answer “No”.

    Sen. Reid To GOP: “At This Stage We’re Not Able To Make A Counteroffer”

    SEN. MITCH MCCONNELL (R-KENTUCKY): My office submitted our latest offer to the Majority Leader last night at 7:10 p.m. and offered to work through the night to find common ground. The Majority Leader’s staff informed us they would be getting back to us this morning at 10:00 a.m., despite the obvious time crunch we all have. It’s now 2:00 p.m., and we have yet to receive a response to our good-faith offer.

    Now, I’m concerned about the lack of urgency here. I think we all know we’re running out of time. This is far too much at stake for political gamesmanship. We need to protect the American families and businesses from this looming tax hike. Everyone agrees that that action is necessary. In order to get things moving, I have just spoken with the Majority Leader. I also placed a call to the vice president to see if he could help jump-start the negotiations on his side.

    The vice president and I have worked together on solutions before, and I believe we can again. I want my colleagues to know that we’ll keep everyone updated. The consequences of this are too high for the American people to be engaged in a political messaging campaign. I’m interested in getting a result here.

    I was here all day yesterday. As I indicated, we submitted our latest proposal at 7:00 p.m. last night. We’re willing to work with whoever, whoever can help. There is no single issue that remains an impossible sticking point. The sticking point appears to be a willingness, an interest, or frankly the courage to close the deal. I want everyone to know i’m willing to get this done, but I need a dance partner.

    ###

    SEN. HARRY REID (D-NEVADA): We have been negotiating now for 36 hours or thereabouts. We did have conversations last night that ended late in the evening between staffs. This morning, we have been trying to come up with some counteroffer to my friend’s proposal. We have been unable to do that.

    I have had a number of conversations with the president, and at this stage we’re not able to make a counteroffer. The Republican leader has told me that — and he’s just said here — that he’s working with the vice president, and he and the vice president, I wish them well.

    In the meantime, I will continue to try to come up with something. But at this stage, I don’t have a counteroffer to make. Perhaps as the day wears on, I will be able to. I will say this, I think that the Republican leader has shown absolutely good faith. It’s just that we are apart on some pretty big issues.

    http://www.realclearpolitics.com/video/2012/12/30/sen_reid_to_gop_at_this_stage_were_not_able_to_make_a_counteroffer.html

  3. Democrats know that an increase in tax rates will only further depress economic activity and will inevitably result in an overall decline in government revenues. But, in spite of inescapable fiscal realities, they insist on counterproductive policies designed to discourage job creators.

    Democrats would rather bite the hand than feeds everyday workers than pass up an opportunity to gouge high earners. It’s sick, it’s destructive, it’s shortsighted, and it’s a cancer on the long-term health of the nation’s economy. Democrats know it and they do it anyway.

  4. I’ve said it many times in the past: the budget should be cut, and I mean cut to the bone, to balance the budget,

    And, as has been shown theoretically and with the immediate experience of the UK, not only would this further devastate the economy, it wouldn’t even balance the budget.

    So says the IMF. You can’t deal with reality.

    and that taxes were already high enough.

    And, as has been shown,. the US did better historically with higher marginal tax rates on the rich.

    That’s a fact. You can’t deal with reality.

  5. The Phoenician wrote:

    And, as has been shown theoretically and with the immediate experience of the UK, not only would this further devastate the economy, it wouldn’t even balance the budget.

    So says the IMF. You can’t deal with reality.

    No, it is that I refuse to be limited by their paradigm. I could balance the budget, immediately, by imposing the one simple rule I have stated previously: no government check will be issued to anyone for anything other than wages and salaries earned, retirement plans paid into, insurance plans paid into, or goods or services delivered under contract. That would immediately cut over a trillion dollars in federal spending, as all welfare programs were eliminated, and all grants were ended. I would end all aid to states and municipalities, and if those governmental bodies thought that they couldn’t absorb the cuts, they could raise taxes themselves, but the federal government would cease carrying the deficits for the states.

  6. “He would rather see other parts of government cut, but cutting somewhere has to be done. The biggest problem with the sequestration provisions of the Budget Control Act is that they are too small!

    So, let’s go off that cliff! That would mean that Yorkshire’s taxes would go up, that Eric’s taxes would go up, that Hoagie’s taxes would go up, that Wagonwheel’s taxes would go up, and that my taxes would go up. It might even mean that the Phoenician’s taxes would go up, as New Zealand would have to pay for more of its own defense burden.”

    Specifically:

    “So, let’s go off that cliff!”

    I agree but it won’t happen. It’s the theory of letting the house burn down in order to free yourself of a vermin infestation.

    This confronts the obnoxious and poisonous roommate them with three options: to survive on their own, which they are incapable of doing; to cooperate temporarily in order to get by at least acceptably; or given that we have this particular chief executive, to go for broke and trash all constitutional agreements and law in an executive driven coup d’etat. (the head being overthrown being our creaking, and by the left despised, Rule of Law)

    My guess is that if the Republicans don’t cave, the Demonicrats will become surprisingly reasonable … as there is no upside to any blame game they wish to play out. Elections are two years away. And a coup will of course sever all social agreements and cut the ground out from under those who attempt it.

    So, let it “fall”.

  7. read

    “This confronts the obnoxious and poisonous roommate them”

    as

    “This confronts the obnoxious and poisonous roommate then, …”

    Ok Dana. Better have your people re-check for another infestation. Sluggish loading, defective or unreliable cursor performance and visibility … the usual problems.

  8. And, as has been shown theoretically and with the immediate experience of the UK, not only would this further devastate the economy, it wouldn’t even balance the budget.

    As I have said to Perry multiple times, the Brits chose austerity to avoid becoming Greece. In short, a little pain now beats a lot of pain later.

    Also, I reject your basic premise, which seems to be that greater prosperity is dependent on greater government spending. As I have also stated, take this “Logic” to its natural conclusion, and East Germany and North Korea would be the most prosperous countries on Earth.

Comments are closed.