“About that Fiscal Cliff”
John Stossel, Reason:
[...] I see the future: The politicians will meet and fret and hold press conferences and predict disaster. Then they’ll reach a deal.
It will just postpone the reckoning, but they’ll congratulate themselves, and the media will move on.
America, however, continues to go broke.
“They’re not going to admit that we’re bankrupt, and they won’t admit that we’re on the verge of a major, major change in our society,” says Rep. Ron Paul (R-Texas). “So they’ll keep putting it aside, but then we’ll eventually probably destroy the dollar.”
The across-the-board cut, or “sequestration,” was designed to be so distasteful that Congress would be moved to cut more deliberately. If it doesn’t act, $110 billion in projected spending will be automatically cut—half from domestic spending, half from the Pentagon.
“They assume that they made it so bad that they wouldn’t accept it, but I don’t think they did,” said Paul. “They’re not even…talking about real cuts. They’re talking about cuts in baseline budgeting.”
Right, the old baseline budgeting trick.
“If they propose, let’s say, a $10 billion increase for next year and cut it down to $9 billion, they say they’re cutting 10 percent. But they’re not cutting anything, they’re only increasing it $9 billion instead of $10 billion. It’s done on purpose so that people get confused.”
Republican House Speaker John Boehner calls the fiscal cliff a “nightmare.”
But why? Trillion-dollar deficits are more terrible.
Allow me to interject here: Boehner is looking for ways to capitulate, because we have, as I noted earlier today and have noted for some time now, essentially a single-party system, with factions in that party warring over who controls the primary levers at any given time. So of course Boehner will promote the left’s narrative, joining them in the messaging of a dire need to “compromise,” then accepting superficial concessions to justify the “surrender” (which to him is not a surrender at all; it’s just getting a deal done!), just as he did when he capitulated on dept ceiling raises. And the establishment GOP will support the moves — we’ve already heard from the several in the “conservative” punditry that fighting a tax increase “on the rich” is not a hill worth dying on (and none of them ever are, from opposing amnesty to defense of traditional marriage to actually standing for the pro-life position you put in your platform to woo the godbotherers) — while demonizing as unhelpful fringe Hobbits those who don’t recognize that we must act pragmatically here if we wish to save the country from such DIRE CIRCUMSTANCES as the NIGHTMARISH fiscal cliff.
Cuts of $110 billion would even be good for us because it would keep money in private hands, away from the bloated and freedom-killing bureaucracy.
“When government spending is about $3.8 trillion, you’re going to cut $100 billion? That’s a deck chair on the Titanic,” said Russ Roberts of the Hoover Institution. “If they’re actual cuts, I think that would be great. I’d cut 10, 20 percent across the board if I had my druthers. But across the board scares people because they think, ‘Let’s save the things that are really important and cut the things that are not so important.’ (But) that never works.”
It doesn’t work because every cent in the budget is absolutely crucial to someone.
Lately the media are focused on the $400 billion in tax increases that make up four-fifths of the fiscal cliff. We’re told that if the Bush-era tax rate cuts expire and the spending reductions kick in, catastrophe will follow.
“The tax increases sound scarier. But we have a trillion-dollar deficit!” Roberts pointed out. “So to me, the idea of raising taxes is probably a good idea. It says this spending that we’ve been doing is not a free lunch.”
I’m not convinced that giving politicians more money is ever a good idea.
And won’t the wealthy high-earners find a way around the higher rates? When rich people do that, much of their money goes to lawyers instead of consumer satisfaction.
Conservatives and libertarian recognize this. And while they may differ on military spending cuts, they nonetheless agree on some conscious or unconscious level that what we’re watching here is yet more political theater — that of course the GOP leadership will capitulate, offering us the same rationales it always does before demonizing us for not understanding the realities of DC.
Marc Thiessen, WaPo:
With the “fiscal cliff” looming and no “grand bargain” in sight, talk in Washington has turned to a “down payment” — a package of spending cuts and revenue increases that would help us avoid the cliff and give leaders more time to strike a long-term deal. House Speaker John Boehner says such a mini-deal would serve as “a down payment on — and a catalyst for — major solutions, enacted in 2013, that begin to solve the problem.”
Unfortunately, the opposite is true. Passing a down payment now could very well doom the chances for major tax and spending reforms next year.
[...] what should Republicans do? Resist the call for a down payment, and insist on real tax reform as the price for any new revenue from limiting deductions. If both sides can’t agree on such reforms this year, they can do it next year. The Post reports this morning that “with tax rates set to rise automatically in January .?.?. Democrats say they have little incentive before then to cut a deal that falls short of their revenue goals. That means going over the cliff, at least for a short time, remains a possibility, they say.”
If Obama and the Democrats want to take us over the fiscal cliff, let them lead the way. Once the Bush tax cuts expire, every American will pay higher taxes — which means the pressure for tax reform on both sides will be even greater. By contrast, if Republicans give away the revenues from deductions and loopholes today, they will alleviate that pressure and have no revenues left to pay for a simpler, fairer, pro-growth tax code next year.
Message to the GOP: A down payment means the death of tax reform.
None of which matters. Because John Boehner wants to be stroked by DC insiders and media leftists far more than he wants to engage in any fight that he believes will be used against him by those very same people whose good graces he so clearly covets. Even if he’s holding the winning hand.
The narrative is being set for capitulation. Just as it always is.
Prepare to be relegated even further to the fringe, Visigoths and “purists.” Because you just don’t understand How DC Works.