Obama’s asking for it; maybe the GOP should give it to him
It appears more and more likely that Washington’s new favorite drama, the fiscal cliff, will run as long as possible.
Passing new legislation before Christmas to avoid the cliff — the doomsday nickname given to the combination of across-the-board spending cuts set during last year’s debt-ceiling negotiations and the total expiration of income-tax rates that have prevailed since since 2003 — now seems unlikely. House Majority Leader Eric Cantor on Wednesday said lawmakers can expect to be in Washington during December’s final days.
The fatal conceit in this debate is that the economy will somehow be well-served, or at least survive, if it takes only a half-dose of what Democrats consider poison (spending cuts) and a half-dose of what the GOP deems deadly (tax increases).
If either party is correct, we are in for a rough 2013 at the very least. If both parties are correct, we could be heading for another recession. The irony is that we’re trying to avoid the fiscal cliff in order to prevent … a recession.
Only President Obama has proposed a pure version of his preferred course: A $1.6 trillion tax hike on upper-income earners over the next 10 years, recently reduced to $1.4 trillion, with no guarantee of net spending cuts. The House GOP’s opening salvo had much more of the “balance” Obama insists on.
Many observers have dismissed the president’s proposal as a mere negotiating stance. Perhaps they’re right. But one presumes he wouldn’t have made a proposal he wasn’t ready to accept.
That is, one presumes Obama really believes taking an extra $140 billion out of the economy each of the next 10 years — remember, he says the money is for deficit reduction, not to fund new government spending — would not be harmful to businesses, workers or the unemployed.
Members of Congress are supposed to do what they believe to be in the best interests of the country and their constituents. But if House Republicans cannot persuade Obama to agree to meaningful entitlement reforms, which along with more rapid economic growth are the only way to bring our fiscal house in order, they should consider giving Obama what he wants.
This is not a decision to be taken lightly. But Republicans might not win this policy argument in the long run if Obama can pin the blame for economic damage on GOP spending cuts, while continuing to demagogue the rich for not paying their “fair share,” without consequences.
And there would be consequences for following his plan. Today, $140 billion equals almost 1 percent of gross domestic product. When the economy is struggling to grow by an annual rate of even 2.5 percent, taking another 1 percent of GDP out of the private sector will not help matters.
But what about the 1990s? Didn’t Bill Clinton raise taxes back then, only to watch the economy boom?
Yes, but there are major differences between then and now. Clinton raised taxes as both the U.S. and world economies were stronger than now. He did it when state taxes were broadly lower than they are now. He did it when oil was closer to $20 a barrel than $90 a barrel. He did it before a record housing boom, not after its bust. He did it at the onset of the IT boom, which doesn’t figure to be replicated anytime soon. And before revenues really grew, he cut the capital-gains tax rate, rather than raising it as Obama desires.
Worse, Obama wants to get most of this $140 billion in part by raising marginal tax rates on “the rich” whether their earnings come from their labor or their investments. This has a significant impact on decision-making. For just one current example, look at the growing number of companies paying their anticipated dividends for 2013 out to shareholders now to beat a potential tax hike.
Some of these companies, Costco for example, are even borrowing money to pull off this switcheroo — committing themselves to pay back billions they only hope to earn as profits in the future. Talk about distorting economic behavior.
Obama says the people voted for these higher taxes. While I believe Obama’s proposal would be very harmful economically, congressional Republicans might find themselves with little choice but to allow his policies to prove him wrong in practice. Obama could hardly blame them for letting him entangle himself with the rope he’s demanding.
– By Kyle Wingfield
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504 comments Add your comment
ATL Tiger
December 13th, 2012
10:55 am
Historical Spending levels have averaged 20.2% of GDP and Historical Tax Revenue levels have averaged 18.1% of GDP
What are they in 2012?
Spending = 23.3%
Tax Revenue = 16.1%
http://www.heritage.org/federalbudget/runaway-spending-tax-revenue
JDW
December 13th, 2012
10:57 am
@Tiberius…”I was unaware that was how we voted in a Constitutional Republic”
Right you are! Could you tell that to the maroon that was say just the other day that if “only” 400,000 people had voted differently…opps my bad that was you wasn’t it.
Rafe Hollister preparing for an Obamanist America
December 13th, 2012
10:57 am
Kyle, the GOP should do their constitutional duty and vote their conscience. The deal will then go down, and yes the GOP gets the blame. The GOP always gets the blame, because they are so inept at selling their point of view and the press is not going to do their work for them. The press is so invested in their man, Barry I, that their is no objectivity there whatsoever. The GOP first needs to find ways around the MSM directly to the people. Then they need to find an erudite, well spoken, effective spokesman and have him explain their position and the dire state of our national financial situation. Buy, thirty minutes on national TV to explain our dire straights.
For once they need to dispossess the people of the notion that Barry is doing any of this for the purpose of improving our debt or deficit. Expose him, not debate him, you can’t debate with a charlatan.
Eventually, after four more years in the economic wilderness, that is Obamanism, people are going to recognize that the economy sucks, because of Barry’s policies and his inability to work with the opposition to bring about necessary changes.
Glenn Beck
December 13th, 2012
10:57 am
LLB
Is that the same weekly standard that ran this article?
http://www.weeklystandard.com/blogs/why-romney-will-win_660391.html
Keep flailing and wailing……..
Thanks for the morning laughs
hahahahahaha
Cheesy Grits is gone but not forgotten
December 13th, 2012
10:58 am
Just reading these posts you can understand why the states with lower education levels are red states.
The irony is the states with the most takers and moochers are all red states.
In fact the extremely poor rural south is mostly subsidized with federal money from the richer blue states.
Malthusianway
December 13th, 2012
10:58 am
Hey Kyle, enjoying all the ideologues here this morning. I’ll join in – “And it won’t be long now”………”by misery and vice”- Thomas Malthus.
We need a “Georgia Valley Association”, dam the Altamaha river and create a Georgian fruited plain……before we all starve…..
Lil' Barry Bailout - OBAMAPHONE!!!
December 13th, 2012
10:58 am
Deflection, Bleck? Is that the best you can do?
Don’t fear facts.
real john
December 13th, 2012
10:59 am
Kyle:
This is exactly what I have been preaching to you. I say give em what they want. Obama and the liberals economic plans are a 100% certainty to fail. I hate it for the country in the short term, but its the only way some of these idiots who keep voting for Dems to realize they literally have no idea what they are doing.
You could tax the wealthy 100% and we would still be in a hole. Obama is only playing lip service to entitlement reform. He has no intention of any reform because that would mean actually making tough decisions.
On our current path, in the next 25 years, Medicare, Medicaid, S.S. and interest on debt will consume every tax dollar.
That’s right lefties, its not the military budget or wars that are eating up the budget, it’s entitlements. The Repubs are the only adults in the room trying to offer real reforms. Of course it’s not going to be popular, but make tough decisions isn’t always easy.
Unfortunately the vast majority of Obama’s voters just aren’t intelligent enough to grasp the country is running out of money and taxing the 1% isn’t going to change that
Lil' Barry Bailout - OBAMAPHONE!!!
December 13th, 2012
10:59 am
Cheesy, in fact, most welfare recipients live in blue states.
Lil' Barry Bailout - OBAMAPHONE!!!
December 13th, 2012
11:01 am
Santa Claus doesn’t have to make tough decisions. He has magical powers.
Tiberius - pulling the tail of the left AND right when needed
December 13th, 2012
11:05 am
JDW, as usual, you’re reading comprehension is at an all-time low.
Even for you.
carlosgvv
December 13th, 2012
11:07 am
Tiberius – 10:31
If Romney had won you’d be the first one here telling liberals to “get over it”.
Hyprocisy does not suit you very well.
Dunwoody Granny
December 13th, 2012
11:10 am
Kyle, I think many of us see this as a matter of fairness. Federal spending under the Obama administration did not rise sharply because of Social Security and Medicare; it rose because of unemployment and the sudden vast increase in the numbers of people eligible for real safety-net programs like food stamps and rent subsidies and Medicaid. This was not aid to chronic layabouts, a lazy class that never wanted to work; this was aid to people who had worked, had paid their way, and suddenly couldn’t. The deficit increased sharply because along with this sudden increase in safety net spending, there was a corresponding drop in federal revenues because people who had previously held jobs and paid taxes could no longer do either. Unemployment and the sharp drop in tax revenues savaged the middle class and destroyed government budgets at all levels. The wealthy hardly lost a step; after a bad year or two, corporate profits went back up and so did executive compensation. There were not a lot of Fortune 500 executives who lost their jobs and their homes, and the few Wall Street bankers who lost their bonuses in 2009 while the government was bailing out their firms complained bitterly about it. Now we have a huge deficit, and when you talk about spending cuts, you’re literally talking about taking food out of people’s mouths. And the lower and middle classes are still recovering from years of pay cuts, layoffs, and being forced into lower-paying jobs. We need to raise revenues, but we can’t get revenues from those people without reducing their buying power and harming the economy. Where can we go to increase federal revenues? Hmm, let’s think.
JDW
December 13th, 2012
11:13 am
@Tiberius…”as usual, you’re reading comprehension is at an all-time low.”
Really…I notice you are not able to actually back that statement up…SOP for Tiberius, pontificate and pronounce. Hummmm…sounds a bit on the egotistical side to me…maybe you should get that checked out.
JDW
December 13th, 2012
11:16 am
O’ and Tiberius…you’re is a contraction for you are. That is different from your. Common mistake among those with reading difficulties.
ATL Tiger
December 13th, 2012
11:18 am
” it rose because of unemployment and the sudden vast increase in the numbers of people eligible for real safety-net programs like food stamps and rent subsidies and Medicaid.”
Spot on.
“Now we have a huge deficit, and when you talk about spending cuts, you’re literally talking about taking food out of people’s mouths.”
The issue here is that these “real safety-net programs” have become a way of life and not a helping hand when you’re down. That is not the intention of safety-net programs, just like its not the intention of a life boat to become a cruise ship.
you can't fix stupid or Democrats
December 13th, 2012
11:23 am
Giving what he wants so in two years we vote out those stupid liberals who want this clown and turn the country around
Finn McCool (The System isn't Broken; It's Fixed)
December 13th, 2012
11:24 am
Cheesy, in fact, most welfare recipients live in blue states
Might need to define “welfare”. Include vets? retirees? farmers?
Tiberius - pulling the tail of the left AND right when needed
December 13th, 2012
11:27 am
“If Romney had won you’d be the first one here telling liberals to “get over it”.”
Actually, carlos, I’m not as petty as you liberals are, so I wouldn’t.
Tiberius - pulling the tail of the left AND right when needed
December 13th, 2012
11:28 am
Someday, JDW, you’ll be acquainted with the term “analysis”.
Just probably not in this lifetime.
Glenn Beck
December 13th, 2012
11:29 am
carlos
He wouldn’t do that has he said, yet he was one of several calling Romney, President Romney before the election………
You two have a great day
nathan's political arsonist
December 13th, 2012
11:31 am
the american people are asking for the president’s plan kyle. you need to have a talk with one mister nate silver on how to read the will of the electorate. it’s really simply math with a credible answer not based on gop fantasy
nathan's political arsonist
December 13th, 2012
11:32 am
John Barrow for Governor in 2014 !! This state need to join the rest of the civilized world.
Kramer
December 13th, 2012
11:32 am
Give him everything he wants with the agreement that he states going “forward” it is Obama’s economy. Then protect your money and get ready for the layoffs. If you voted for Obama and get laid off, yell at the person in the mirror. We are going to have to suffer for a while to prove that his policies do not work. Sorry kids but, no other way out of this mess.
JDW
December 13th, 2012
11:36 am
@Tiberius…”Someday, JDW, you’ll be acquainted with the term “analysis”.”
Why look more pontificating with no basis in fact.
Tiberius - pulling the tail of the left AND right when needed
December 13th, 2012
11:36 am
I’m sorry; which sock puppet are you, Glenn Beck?
I have trouble keeping you guys straight.
Hamilton
December 13th, 2012
11:37 am
Congress is just mirroring the people’s behavior. Here we are on the blog calling each other stupid and drawing lines in the sand. We don’t mind burning the neighborhood down over our so-called “principles.” That’s the message we the people send to our elected representatives whether they are local, State or Federal. If you’re moderate, you’re screwed because nobody listens to you. You’re not valuable to our polarized situation – you’re pushed to the margins.
Country first, people.
Tiberius - pulling the tail of the left AND right when needed
December 13th, 2012
11:37 am
Why look; more lack of understanding of the English language by JDW.
JamVet
December 13th, 2012
11:37 am
Tell us again how everybody but you Romney cons are nothing but stupid lazy takers and mooches on the plantation, OK?
…so in two years we vote out…
After all, that winning strategery worked so well for you back on November 6th.
At this rate, if you trickle down rubes win the White House back within 12 years, I’ll be shocked…
Cheesy Grits is gone but not forgotten
December 13th, 2012
11:40 am
Cheesy, in fact, most welfare recipients live in blue states.
In fact they dont. Red states have a much higher percentage of people on welfare.
It isn’t even close.
Cheesy Grits is gone but not forgotten
December 13th, 2012
11:42 am
In the last 24 years the Republican have gotten more votes in exactly 1 National Election.
If it wasn’t for the rigging of districts in the House they would be gone altogether.
I wont be much longer though.
Over 60 percent of people 30 and under voted Democratic this time around.
Cheesy Grits is gone but not forgotten
December 13th, 2012
11:46 am
The trickle down policies of the Republicans have been an absolute failure.
They have done nothing but drive us into the debt we are in.
Thank God the country is finally waking up. It took over 4 years to clean up after the last Republican disaster.
Now the economy is looking a lot better and things are moving forward.
Thank you Obama
JDW
December 13th, 2012
11:47 am
@Tiberius…”more lack of understanding of the English language by JDW”
Really lets look…
Analysis-the process of breaking a complex topic or substance into smaller parts to gain a better understanding of it.
For example the recent election process. As I remember I analyzed the situation and concluded that Obama would win with 300+ EV’s, Dems would retain the Senate with 53+ and make gains of 3 to 7 in the House.
You on the other hand had a gut that told you Romney would win, thought the Senate too close to call and dismissed any gains in the House.
How did that analysis work out for you?
Cheesy Grits is gone but not forgotten
December 13th, 2012
11:49 am
Jobless claims tumble to lowest in 2 months
The number of American workers seeking unemployment aid fell by much more than expected in the latest week, a sign that the labor market continues to heal, although slowly and in fits and starts.
The Labor Department reported Thursday that new jobless claims dropped a seasonally-adjusted 29,000 to 343,000, the lowest in two months and the second-lowest total this year. It was the fourth straight week that jobless claims have fallen.
Economists had expected a flat reading on new jobless claims.
Thank you Obama
Tiberius - pulling the tail of the left AND right when needed
December 13th, 2012
11:50 am
JDW, comparing your “analysis” from a few days before the election, and my projected calls from 12 months before is like comparing apples to oranges.
Or comparing you to an intelligent person.
Kevin
December 13th, 2012
11:53 am
I support fully going over the cliff and letting everyone’s taxes go up. Every single person.
Maybe then people will realize the true cost of their government and they’ll pay more attention.
Cheesy Grits is gone but not forgotten
December 13th, 2012
11:53 am
You on the other hand had a gut that told you Romney would win
Kyle’s gut told him the same.
Bush used to make decisions based on his “gut” as well.
Might as well say gut means wishful thinking.
Us Democrats. We like to use our brains and things like logic and reason.
Stephenson Billings
December 13th, 2012
11:54 am
And it’s just not taxes either:
ELECTION OVER, ADMINISTRATION UNLEASHES NEW RULES
“While the “fiscal cliff” of looming tax increases and spending cuts dominates political conversation in Washington, some Republicans and business groups see signs of a “regulatory cliff” that they say could be just as damaging to the economy.
For months, federal agencies and the White House have sidetracked dozens of major regulations that cover everything from power plant pollution to workplace safety to a crackdown on Wall Street.
The rules had been largely put on hold during the presidential campaign as the White House sought to quiet Republican charges that President Barack Obama was an overzealous regulator who is killing U.S. jobs.
But since the election, the Obama administration has quietly reopened the regulations pipeline.”
http://hosted.ap.org/dynamic/stories/U/US_OBAMA_REGULATIONS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-12-13-03-21-05
Stephenson Billings
December 13th, 2012
11:55 am
And Libs say conservatives are stupid:
And the Winner of TIME’s Person of the Year Reader Poll Is…
“Kim Jong Un is having a good year. After taking over the leadership of North Korea from his late father Kim Jong Il, at the end of 2011, he’s solidified his control over the country, appeared on TIME’s cover and he was even named ‘Sexiest Man Alive.’ (OK, that honor was actually bestowed as a spoof in the satirical newspaper, The Onion, but a Chinese news service mistook the Onion piece for real news and the story went global.)
Now, he’s gotten the most votes in TIME’s completely unscientific reader Person of the Year Poll with 5.6 million votes. Not bad for a man who didn’t make an official public appearance until 2010.”
Stephenson Billings
December 13th, 2012
11:57 am
“Jobless claims tumble to lowest in 2 months”
That’s what happens when your unemployment runs out. Even at 99 weeks, it has to end sometime.
Stephenson Billings
December 13th, 2012
11:58 am
“Over 60 percent of people 30 and under voted Democratic this time around.”
Kinda sad. But I guess all that indoctrination is working.
Tiberius - pulling the tail of the left AND right when needed
December 13th, 2012
12:07 pm
“Jobless claims tumble to lowest in 2 months”
And let’s remember what season this is. You know, the one where all sorts of temporary workers are brought on in retail?
Only to be dropped in January or February.
JamVet
December 13th, 2012
12:09 pm
“And Libs say conservatives are stupid:”
Not actual conservatives (though I haven’t actually seen any in AGES), just neocons masquerading as them.
But that problem now seems to be fixing itself…
Cheesy Grits is gone but not forgotten
December 13th, 2012
12:12 pm
And let’s remember what season this is. You know, the one where all sorts of temporary workers are brought on in retail?
They adjust for that.
Try again
HDB
December 13th, 2012
12:12 pm
Finn McCool (The System isn’t Broken; It’s Fixed)
December 13th, 2012
9:55 am
Finn, I see the same thing…………
Tiberius - pulling the tail of the left AND right when needed
December 13th, 2012
12:15 pm
“They adjust for that. ”
They adjust for EVERYTHING.
It’s called “cooking the books”.
Try again, Cheesy.
JDW
December 13th, 2012
12:17 pm
@Tiberius…”comparing your “analysis” from a few days before the election, and my projected calls from 12 months before is like comparing apples to oranges.”
Ughhh…no….I am refering to your posts in the day leading up to the election. In fact I believe the last such post was within a couple of days…so no we have apples to apples here…even if you “can’t remember”
Cheesy Grits is gone but not forgotten
December 13th, 2012
12:17 pm
Kinda sad. But I guess all that indoctrination is working.
Younger people tend to be more educated.
Educated people tend to vote Democratic.
Reality
December 13th, 2012
12:17 pm
Summary from Kyle and other idiot conservative republicans….
WHINE!!!!
You didn’t win the election. The people of America don’t agree with you. Get over it.
NotYou
December 13th, 2012
12:17 pm
Wow. Getting ready to go into a second term and some are still blaming Bush. Not a Bush fan, but when, if ever, will the current president ever have to take responsibility?