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
Cheesy Grits is gone but not forgotten
December 13th, 2012
12:17 pm
“They adjust for that. ”
They adjust for EVERYTHING.
It’s called “cooking the books”.
Try again, Cheesy.
I win
JDW
December 13th, 2012
12:18 pm
@Cheesy…”We like to use our brains and things like logic and reason.”
Indeed! It is like understanding that when you cut taxes and increase spending you get deficits…duhhhh…someone should have told Duhbya and Ronnie.
Time
December 13th, 2012
12:19 pm
I tend to agree. Let these people who voted for this guy get what they want. Give it to them and watch the poor they supposedly care about take the brunt of it. When you raise taxes on the supposed rich, does anyone really believe they’re going to eat that tax cut out of their own wallets? The raise taxes on the rich crowd are really too naive to even have a say, but this is America, and even the dumbest people are allowed to help in the downfall of the country. Because what is going to happen is the tax hike on the rich is just going to get passed down to the poor in the form of lower wages and higher prices. Trickle down taxation designed to keep the poor exactly where they are….poor and dependent on one party of government for whatever they get.
So yea, I’m all for it. Republicans should just all stand up in unison and capitulate. They should offer no resistance to any and all socialist progressive programs Obama and the wicked witch of the west (Pelosi) can dream up. Let them drive this country to the brink of 3rd world status. Idiots in this country deserve what they get. I’m already poor, and really can’t be made much more poor than I am now. So have at it progressive socialist types.
Cheesy Grits is gone but not forgotten
December 13th, 2012
12:19 pm
Wow. Getting ready to go into a second term and some are still blaming Bush
He left that big a pile of poo on the doorstep.
Its taken awhile to get the ship turned around.
Stephenson Billings
December 13th, 2012
12:19 pm
Day-Oh!
Belafonte’s Advice to Obama: Imprison Opposition “Like a Third World Dictator”
http://www.thegatewaypundit.com/2012/12/belafonte-advice-to-obama-imprison-opposition-like-a-third-world-dictator-video/
JDW
December 13th, 2012
12:20 pm
“Kinda sad. But I guess all that indoctrination is working.”
Could be that younger people really are smarter.
NotYou
December 13th, 2012
12:21 pm
@Cheesy Grits- Younger people and educated people also watch reality TV. What’s your point? My former college friends are very educated but are enamoured by the celebrity of the president. They have a tough time seeing past their love affair, despite how logical they may think in all other areas of their lives.
Tiberius - pulling the tail of the left AND right when needed
December 13th, 2012
12:23 pm
” In fact I believe the last such post was within a couple of days”
Except that what you believe is usually wrong, JDW.
“Younger people tend to be more educated.”
There is a huge difference between “educated” and “informed”, Cheesy. The re-election of President Incompetent proves that.
Rafe Hollister preparing for an Obamanist America
December 13th, 2012
12:24 pm
JamVet
Not actual conservatives (though I haven’t actually seen any in AGES),
What color is the sky in your world?
Stephenson Billings
December 13th, 2012
12:25 pm
“Educated people tend to vote Democratic.”
Um, not exactly:
“In an interesting result, level of education seemed to make little difference in a particular voter’s preference. Obama led Romney by only 2 points among college graduates, 50 percent to 48 percent, almost exactly the result in the general population.
And Obama only did 1 point better among voters who don’t have a college degree.”
http://www.cnn.com/election/2012/results/race/president#exit-polls
Rafe Hollister preparing for an Obamanist America
December 13th, 2012
12:25 pm
Could be that younger people really are smarter.
Could be that they have never been acquainted with truth and reality.
Cheesy Grits is gone but not forgotten
December 13th, 2012
12:26 pm
Younger people and educated people also watch reality TV.
And old people watch a lot of Matlock and Murder she Wrote.
Whats your point ?
Stephenson Billings
December 13th, 2012
12:29 pm
“Could be that they have never been acquainted with truth and reality.”
True. What’s that saying? If you’re not a liberal when you’re young, you have no heart. If you’re not a conservative when you’re older, you have no brain.
Cheesy Grits is gone but not forgotten
December 13th, 2012
12:29 pm
Could be that they have never been acquainted with truth and reality.
Or could be that they are better educated ( They are )
And the higher the education level the more likely one is a liberal and votes Democratic.
Time
December 13th, 2012
12:31 pm
““Educated people tend to vote Democratic.” – Intelligence and education are two different things. You don’t have to be intelligent to be “educated”.
Cheesy Grits is gone but not forgotten
December 13th, 2012
12:31 pm
And Obama only did 1 point better among voters who don’t have a college degree.”
http://www.cnn.com/election/2012/results/race/president#exit-polls
Check the numbers on people with advanced degrees.
They overwhelmingly went to Obama.
Stephenson Billings
December 13th, 2012
12:32 pm
I’m willing to bet that most of those under-30 voters are still living at home because they can’t find a job with their art history degrees.
JamVet
December 13th, 2012
12:32 pm
Rafe, like YOU are a conservative???
Too funny.
But for entertainment purposes you are welcome to explain…
Tiberius - pulling the tail of the left AND right when needed
December 13th, 2012
12:33 pm
“And old people watch a lot of Matlock and Murder she Wrote.”
Actually, they tend to watch a lot of NEWS, hence they are usually more informed.
At least, when the Democrats aren’t trying to scare the crap out of them with lies.
Rafe Hollister preparing for an Obamanist America
December 13th, 2012
12:33 pm
Indeed! It is like understanding that when you cut taxes and increase spending you get deficits…duhhhh…someone should have told Duhbya and Ronnie.
JDW
Indeed! When you increase spending while raising taxes, you slow down the economy. Economic growth is the only hope we have of ever getting out of this financial implosion… duhhh….. someone should tell Obama, Reid, and Pelosi.
Fixed that for you JDW!
Stephenson Billings
December 13th, 2012
12:33 pm
“Check the numbers on people with advanced degrees.
They overwhelmingly went to Obama.”
You mean those “students” who spend years and years on a college campus and not in the real world? Not surprising.
Stephenson Billings
December 13th, 2012
12:34 pm
Kinda like Sandra Fluke. But I digress….
Doing the do
December 13th, 2012
12:34 pm
Stephenson
Are you saying it is getting crowded with you and your younger brother in your parents basement since he moved home?
Stephenson Billings
December 13th, 2012
12:35 pm
Although just about all the people I know with advanced degrees are conservative. That’s probably because they’re in something useful like engineering or medicine….
JamVet
December 13th, 2012
12:36 pm
Stephie, did you ever get those Rush Limbaugh slut videos of her that you ordered?
Stephenson Billings
December 13th, 2012
12:36 pm
“Are you saying it is getting crowded with you and your younger brother in your parents basement since he moved home?”
Yea, exactly. You nailed me. I feel ashamed.
/sarcasm
TRUTH
December 13th, 2012
12:37 pm
Wow…arguing over things that have been passed on for years!! Entitlement reform – Er, when the R’s had control, guess the wars took your eyes OFF the fiscal ball. Job creators – the American workforce has experienced the most paralyzing loss of income/jobs and have experienced a colossal increase (equated to loss of pay) through healthcare benefits DIRECTLY related to those “job creators.” The American economy was battered by incredible job losses through the 2000’s culminating in stagnating loss of revenue from the living room, through communities, cities, counties and have wreaked havoc on State budgets, COUNTRYWIDE. Bank deregulation, out of control healthcare costs, corporate greed, and quizzical efforts by R’s to retard voter turnout, women’s health issues, DOMA, and other policies that clearly are country forward being held hostage in Washington by R’s who have a power mandate to protect the rich, corporations, the evangelical right, and the crumbling Republican ideals that make no sense and frankly, loses any validity when details (or the lack thereof) are fact checked.
Here is the TRUTH – The American people spoke. Loudly. They reelected a sitting President not just because of his color, his ability to channel Al Green, not just by Latinos/Hispanics, not just by young college educated citizens, not just by African-Americans, not just by the elderly, not just by food stamp recipients, not just by labor unions, no one group alone reelected the President. The American People reelected the President. The Republican Party is in its “Reinvent” mode, but continues to be challenged by its own self-inflicted wounds, by most comments, the wounds could be fatal to the party. I think those wounds are shutting down the more rational aspect of the party. When it is clear that the American people want solutions from their elected Republican officials, it is not the constituency that they represent, it’s Grover Norquist and the Americans for Tax Reform. He has a pledge from a large Republican contingent that he has no problem beating them with. So we see who owns the R’s on tax reform. With regard to healthcare, hmmmm, R’s defend them and pass legislation that protects them from negotiating pharmaceuticals, protect big insurance from single payer (public options), big business to keep wages low and eliminate collective bargaining rights, and allow big business to take the country’s working class (middle or otherwise), back to the repressive and dangerous practices that necessitated labor unions and legislation to prevent those practices in the first place.
The R’s have painted themselves as obstructionists. Here is a line from the campaign, “We have tried those policies in the past and they have failed.” One only needs to look at the economy from 2000 – 2008. Then look at the Obama period from the President’s initial win to now. We the people see progress, we just haven’t felt it at our level yet (gee, thanks, Republicans!!). We see the progress, although you R’s cannot. We believe in the progressive trajectory we are on, although you R’s cannot and were soundly beaten. We want our country to succeed, on our terms, with everyone pitching in, not penalizing success, more encouraging success and all paying their fair share. That’s how we advanced as a nation through Clinton’s administration, only to fall back after the Bush years.
We have a clear picture of our future and WE have spoken. The acts of the R’s in Washington are incredulous, petty, and a danger to our economy. Sure we can clean up entitlements to run more efficiently, not obliterate them. I’ve worked hard all my life. I’ve served my country in the military. I have had debates with R’s, Cons, Neo-Cons, and I’s. And we always walk away from one another having learned something. One of my friends, a devout and proud R, said to me the other day, “Although I thought our party’s nominee was weak in some areas, I thought he would win because of my party’s hate of Obama. What I’ve come to realize is that you can’t hate a person for partisan reasons, you must hate him for his policies. The President policies are working, effectively.” And with that he became a Democrat.
I feel badly for your losses R’s. The American people just don’t want what your selling anymore.
Cheesy Grits is gone but not forgotten
December 13th, 2012
12:40 pm
Actually, they tend to watch a lot of NEWS, hence they are usually more informed.
Actually they watch alot of Fox News. Meaning they are terribly mis informed.
Fox wins big with the blue hair crowd.
Stephenson Billings
December 13th, 2012
12:40 pm
I see Truth got his/her Dem talking points today
Cheesy Grits is gone but not forgotten
December 13th, 2012
12:41 pm
Although just about all the people I know with advanced degrees are conservative.
All the ones I know are very liberal and vote Democratic.
RetiredSoldier
December 13th, 2012
12:43 pm
Amen NotYou
Road Scholar
December 13th, 2012
12:43 pm
Yeah. We need more revenue so tax the top 2%. You contend that this will take money away from consumers. You propose spending cuts…no drastic spending cuts.. and this takes money from private businesses THAT DO THE GOVERNMENTS WORK…so the public will again lose the jobs and earnings that that money provides.
You do not want to be Greece, but by making the cuts drastic paves the way for us to be just like Greece!
Now what spending cuts has Boehmer suggested? I bet it does not include the military! At least going over the cliff cuts military spending!
JDW
December 13th, 2012
12:45 pm
@Tibierus…”Except that what you believe is usually wrong”
Really…
Tiberius – pulling the tail of the left AND right
November 2nd, 2012
6:45 am
“I like the way early voting is going with less Democrats and more Republicans. Given that historically more Republicans vote in significantly higher numbers on election day, if the trend continues we’ll be say President Romney early on November 7th.”
Opps didn’t happen that way did it?
Tiberius – pulling the tail of the left AND right when needed
November 2nd, 2012
8:04 am
“because the majority of polls in question have oversampling of Democrats trying to mimic 2008 turnout (which I don’t believe will happen), and two, because voting trends of actual and historical trump polls.”
Opps Faux News led you astray I suppose…
Tiberius – pulling the tail of the left AND right when needed
November 5th, 2012
7:12 pm
“I still maintain that it will be less than 20 electoral votes between the winner and loser. That will be thrown out the window if Romney wins PA. And given the early absentee voting in OH and demographic changes, I just don’t see a path for Obama to win that state.”
Opps…now how did Ohio turn out? Do the numbers 332 to 206 ring a bell…pssttt thats a difference of 126 not less than 20.
JDW
December 13th, 2012
12:47 pm
@Rafe…”Indeed! When you increase spending while raising taxes, you slow down the economy. Economic growth is the only hope we have of ever getting out of this financial implosion… duhhh….. someone should tell Obama, Reid, and Pelosi.”
Whew I am glad Clinton listened to that argument…O’ wait he didn’t…how did that turn out?
Road Scholar
December 13th, 2012
12:50 pm
S Billings: My wife has her PhD and I have practiced engineering for 36 years. We are independent leaning fiscally conservative Demos who vote for the best person running. The repubs in this state have little to offer. They talk about saving our freedom…and then make rules for abortions, etc restricting freedom of choice . They make tax cuts for businesses that do not need them (Delta fuel tax cut -$1.6 BILLION in profits.)
Tiberius - pulling the tail of the left AND right when needed
December 13th, 2012
12:50 pm
Yes, yes, JDW. I was wrong in my prediction on the Presidential election, as I stated the very next day.
Doesn’t discount the fact that you were using my predictions from 12 months beforehand in your previous comment.
JDW = liar.
RetiredSoldier
December 13th, 2012
12:51 pm
Road-
And the Dems are like you, fiscally conservative?
Cheesy Grits is gone but not forgotten
December 13th, 2012
12:52 pm
Excellent work JDW.
Sometimes you just have to put it right in their face to get them to see the light.
TRUTH
December 13th, 2012
12:53 pm
No Stephie, my boy, I attended a public school, went to college (working my way through), served in the military, returned to the private sector and am doing something useful (you know, like a doctor, engineer, or a lawyer….). I also have lived over 50 years and remember when you didn’t have to do all that and you could get a job, and take care of you and your family. You could move up in the company from hard work and determination and be a better citizen in your community. (Guess those are talking points too). And hey, those great wages that everyone was making came from labor arguing for better for the average person.
And your argument about Democratic Talking Points was what again?
From the Center
December 13th, 2012
12:53 pm
“Younger people tend to be more educated”
may or may not be true, but with age comes wisdom and more fiscal conservitive views. IMHO
Aesop's Fables and other Lib Economic Theories
December 13th, 2012
12:55 pm
Sister Sarah
December 13th, 2012
10:32 am
I’d like to think that Kyle Wingfield isintelligent and man of conscience. I cannot help but wonder if he rolls his eyes at some of his faithful posters that come out here daily and serial post the same delusional madness day in and day out, all under the guise of “Conservatism”. In fact, it’s one of the things in my opinion that brings his blog in particular down. This is why I peek in every so often to see what’s going on and not frequent this place……..In fact I think it aids in the debate when you challenge people who are even on the same side of the political aisle as you, esepecially if you see they hurt the cause by perpetual bombasticity, crackpot propaganda and those things.
From now on, when presented with the facts, which I don’t expect to see very often from any libs, I will respond by hysterically shrieking that ROMNEY LOST THE ELECTION!!!!, so that Sister Sarah will feel more ideologically comfortable and will come here more often.
Honest, I will.
JDW
December 13th, 2012
12:59 pm
@Tiberus…”Doesn’t discount the fact that you were using my predictions from 12 months beforehand in your previous comment.”
Yet, as I just pointed out your comments came DAYS before. As in Nov. 2 & 5.
Rafe Hollister preparing for an Obamanist America
December 13th, 2012
12:59 pm
JDW
Pure ideological spin!
Clinton held federal spending down. “The era of big government is over!” He lowered the cap gains tax and he benefited from the I/T boom, which was pure serendipity. Growth fueled Clinton’s success with the economy and growth can help us get out of this mess, if Obama did not shoot himself in the fool at every turn.
JDW
December 13th, 2012
1:00 pm
Why thanks Cheesy…I am getting really tired of the “repeat a lie until everyone believes it” tact.
Cheesy Grits is gone but not forgotten
December 13th, 2012
1:01 pm
Yes, yes, JDW. I was wrong in my prediction on the Presidential election, as I stated the very next day.
You weren’t just wrong.
You were off the reservation on another planet way way off.
This is what happens when you get your info inside the conservative media bubble.
You dont really get anywhere close to an accurate picture of whats happening.
Mike Silver and the New York Times nailed it. Conservative media and Fox News. Way way off
Very telling.
Rafe Hollister preparing for an Obamanist America
December 13th, 2012
1:01 pm
JamVet
I am not going to debate conservatism with someone, who sits to the left of Chairman Mao.
redneckbluedog
December 13th, 2012
1:02 pm
Do it Boehner…Run it off the cliff….!!!!!! Default the country and the American people by not raising the debt ceiling….!!!!!! Let’s see who gets the blame…!!!!
America will recover from electing fools like you and others in states like Michigan, Virginia, Florida, Ohio, and Wisconsin….We recovered from 9/11, Vietnam, and the Civil War….
Sure, it may take a while and be very painful…but it will be worth it to permanantely rid the country of the left-over Conservative STENCH that has beset this great land since the days of the Bush adminstration…..!!!!!!
Cheesy Grits is gone but not forgotten
December 13th, 2012
1:03 pm
From now on, when presented with the facts, which I don’t expect to see very often from any libs, I will respond by hysterically shrieking that ROMNEY LOST THE ELECTION!!!!, so that Sister Sarah will feel more ideologically comfortable and will come here more often.
Honest, I will.
Thats all we are asking you to do.
Rafe Hollister preparing for an Obamanist America
December 13th, 2012
1:03 pm
Cheesy, I thought it was Nate Silver? Is it true that you wish you were female, so you could have his baby?
Aesop's Fables and other Lib Economic Theories
December 13th, 2012
1:05 pm
Is having a blog handle “Cheesy Grits” more demeaning to the intelligence of Mitt Romney or to the person that uses such a ridiculous handle?
ROMNEY LOST THE ELECTION!!!!, cheesy.