Wednesday, January 05, 2011
No taxes at all?(Happy New Year, everybody.) Digby writes: (emp add) The debate has officially shifted from "deficit reduction" to "cutting spending to reduce the deficit." This has to be one of the fastest internalization of GOP propaganda in history and that's saying something. [Chris] Matthews may be an outlier, but from what I saw today among the gasbags, they are all coming on board very quickly. If I had to guess, it was the lame duck deal that finally took taxes off the table for the Villagers. It's dead as far as they are concerned, so "cut-go" is the only way to reduce the deficit. As far as I can tell, the "Obama Deal" had no tax increases whatsoever. None. It's hard to say what matters anymore in this world, but would it have made a difference if there had been some tax increases in there (like eliminating the capital gains rate for hedge fund managers)? Was a 100% tax cut deal a signpost to future action - in this case nothing but program cuts?
posted by Quiddity at 1/05/2011 11:40:00 AM
13 comments
This comes as no surprise to me. The clearest message of the Tea Party movement was, "The government is spending too much", and that's what I fully expect to be the guiding principle of the incoming House.
What's working in their favor is the fact that they don't need the Senate or the President in order to refuse to fund government programs. If the President and the Senate want the endless Federal agencies and departments to receive any funding at all, they will have to play ball with the House. The House can easily pass a bill just funding Medicare, Medicaid, Social Security and the Military budget, and the Democrats and Obama won't dare veto it, because then it will be them making the checks stop. Everything else is on the table.
Now if they are smart the House will fund the government for the next two years with 30 or 60 day appropriations to individual departments and agencies, with stringent restrictions on use of the funds. Senate and President don't want to pass a House bill? Well, then the NEA loses all of its funding. Still not cooperating? Goodbye public broadcasting. The House has the power to in effect shoot hostage agencies until the budget is balanced. Then it can shoot more of them to reduce the national debt.
And they can do all of that without raising the debt limit or defaulting on treasury bonds.
'course, they can't do that without a repeat of the 1936 election, either.
for the historically-challenged, the Dems won 80% of the seats in the House and 85%+ in the Senate.
The fundamental flaw with the current conservative ideology is that the problem isn't the government is spending too much.
The core problem was the bubble economy of 2002-2007 ratcheted in a cost-of-living that most Americans can no longer afford now that the bubble is gone.
The next 2 years is going to be a very simple fight over the future of the nation. Back to Reagan voodoo economics or Clintonian middle-way.
Gonna be a tough 2 years tho.
As for the deal itself, Congress kicked the can too far down the road by putting off 2011 tax policy all the way into December.
Obama's team wasn't willing to have the Republicans shoot the hostage while the Dems still had majorities in both houses (by having a Gingrich-style freeze).
Better let the Republicans get all what they want now and then let the games begin in 2011.
Well, if you want to go to root causes, one of the big ones is the flipside of progressive taxation. When the economy is doing well, lots of people fall into the higher tax brackets. Then the economy tanks, and most people drop down a tax bracket or two, and tax revenues collapse.
I sort of feel like the Republicans are in the position of having inherited command of the Titanic after the captain has already steered it into the iceberg. The Democrats created the permanent 2 trillion dollar deficit, and are now going to blame the Republicans for not having already fixed it.
I think that there are a lot of boutique agencies, like the NEA, NEH, public broadcasting, AmeriCorps, etc, that conservatives are ready and willing to axe. Those in and of themselves won't save much money but will be symbolic.
The focus on the Constitution is important. The principle that will carry the budget cuts through is the principle that X program is being cancelled because it is not authorized by the Constitution. I don't think that liberals understand the power of that argument on Conservatives. And yes, Republicans are in a position to use the principle arbitrarily and strategically. How well they do so will determine how well they do.
That was me, jms. For some reason my Firefox session messed up and posted as anonymous.
No need to tell us who you are, jms. Your cut-and-paste GOP talking points bullshit clearly identifies you.
The Democrats created the permanent 2 trillion dollar deficit, and are now going to blame the Republicans for not having already fixed it.
Christ.
You don't have the first clue what happened in the previous decade.
Here's some hints.
1) Household debt rose from $8T in 2002 to $14T in 2007. That's $6T of debt-money being spun into the economy via the home ATM. This debt-money funded MILLIONS of jobs, and not the paper-pushing just real estate agents and loan brokers -- there was all the construction, and all the industrial support all that construction required, AND all the retail that went into home refurbishing, AND all the totally extraneous spending that people were supporting thanks to turning their ephemeral home equity into cold hard cash.
Here's a graph:
http://research.stlouisfed.org/fred2/series/CMDEBT
Then, when all that funny money evaporated with the housing crash of 2007-2008, the economy found itself on the precipice. We could have let the whole thing collapse, like 1930-32 in the US or 1990-93 in Japan, but the PTB decided on intervention.
Note that this fiscal intervention got going under Bush, in 2008:
http://research.stlouisfed.org/fred2/series/FYGFDPUN
National debt has spiked from $5T in late 2007 to $9T today, about the same amount of increase that household debt was going during the Bush boom.
You're free to propose spending cuts, but you should know that without the deficit spending, we wouldn't even HAVE an economy now. The old economy got killed Sept 2008 and we've just been faking it since.
Question: When is "Anonymous" not jms?
Answer: When "Anonymous" makes sense, as with the most recent "Anonymous" comment.
We could have let the whole thing collapse, like 1930-32 in the US or 1990-93 in Japan, but the PTB decided on intervention.
Analogy: I lose my job. I can't find a new job. To make up the difference between my old salary and my unemployment check, I apply for as many credit cards as I can and use the money as if I had never lost my job. Now, six months later, with a hundred different credit card bills on the kitchen table, I'm maxing out the newer cards to pay the minimum payments on the old cards.
My family tries to intervene. I tell them:
"You're free to propose spending cuts, but you should know that without the credit card spending, we wouldn't even HAVE an house now."
Well, that's true in a very short-sighted sense, but only makes sense if you ignore the fact that I have turned a difficult situation into an impossible one.
That's what the government has done. And yes, Bush's seriously damaged his legacy by going along with the insane spending. Down the road, It may be the only thing he's remembered for.
The kitchen-table analogy fails because the US Gov can in fact print money to satisfy its creditors.
But for this to work, the resultant inflation has to "trickle down" into wages across the economy.
But your analogy is correct in general. We are kicking the can down the road. It may not be the best strategy.
But this deficit spending is not the problem, the problem is we killed the postwar economy over the period of 1993-2008 (NAFTA, MFN with China, deregulation, housing bubble) and have replaced it with a $6.7T/yr big government economy.
We can either get rid of the big government or raise taxes. The latter is much less destructive (because, at the end of the day, all taxes come out of rents).
The first hostage has been selected
[Congressman Doug] Lamborn said in a statement: “We simply cannot afford to subsidize NPR, or any other organization that is not doing an essential government service. The government must learn to live within its means.”
Troy thinks that the public will revolt against slash-and-burn cuts in Federal spending. I don't think so. Because the vast majority of Americans are now in too much debt (largely due to the housing bubble), average Americans are in a psychological state where they are ready and willing to make deep personal sacrifices to reduce their personal debt. Partly because they are being forced to, and partly because they expect to have a better life with their personal debt reduced. Because they are doing this in their personal lives, they will want the government to deleverage as well and will be pleased to see the government doing it.
This is a trial balloon. If defunding NPR polls positive with the general public and earns praise and campaign contributions for those who champion slashing down boutique federal programs, then watch Republicans and many Democrats jump on the defunding bandwagon. Most Congressmen want to do what it takes to get reelected. In normal circumstances, the way to do that is to bring in pork and increase government spending. If the political climate is so deeply changed that the opposite is now true, those same Congressmen will start clearcutting the government without even blinking.
But we shall see.
Because they are doing this in their personal lives, they will want the government to deleverage as well and will be pleased to see the government doing it.
what a pile of smarmy self-serving political bullshit.
ie your brand of conservativsm in a nutshell.
NPR's $2.4M from the CPB is a bit different than grannie's new hip that's also on the Republican chopping block.
Every $50,000 that government cuts is going to be at least one life materially effected, and a multiple of voters.
Cut away, Republicans. See you in 2012.
NPR's $2.4M from the CPB is a bit different than grannie's new hip that's also on the Republican chopping block.
If you had read my initial post, Troy, you would see that my position was that the House should "pass a bill just funding Medicare, Medicaid, Social Security and the Military budget."
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