Al Hunt states the case that Republicans, Democrats, and the White House alike lost in the deal for avoiding the “fiscal cliff”:
The bottom lines: The White House believes Republican leaders privately realize that holding the nation’s full faith and credit hostage to cutting popular programs is a loser. Congressional Republicans dismiss Obama’s lines in the sand, saying he invariably backs down and that any economic fallout ultimately hurts his presidency.
Both points are persuasive.
I certainly lost. I hold the unpopular position that the Bush tax cuts should have been eliminated in toto. Fortunately, I’m accustomed to being lonely. Now those cuts have been made permanent for 99% of taxpayers.
It seems self-evident to me that if you’re anti-tax you’ve also got to be anti-spend. The line drawn by Democrats is that they’re opposed to raising the taxes of 99% of taxpayers. Mathematically, that should mean that they’re willing to limit their spending demands, too, since you can’t spend what they want to spend just by taxing the top 1% of income earners. The numbers just don’t add up.
The line drawn by Republicans is that they’re opposed to raising the taxes of the top 1% of income earners. Hardly a populist position. I can only speculate that they’ve convinced themselves that if only you cut the taxes of the highest income earners enough it will produce a huge surge of economic growth. I just don’t see the evidence of that. If you don’t believe me, look at the minimal, short-lived effects of the tax cuts in 2002 and 2003.
The big winner is cognitive dissonance.
“I hold the unpopular position that the Bush tax cuts should have been eliminated in toto. Fortunately, I’m accustomed to being lonely.”
Aye, laddie. You are not so much lonely as a victim of general ignorance. Only when the absurdity of “free beer” becomes reality to the general populace will spending constraint be real. Obama shows no signs of anything but pure stupidity……….or pure mendacity on the subject.
“It seems self-evident to me that if you’re anti-tax you’ve also got to be anti-spend. The line drawn by Democrats is that they’re opposed to raising the taxes of 99% of taxpayers. Mathematically, that should mean that they’re willing to limit their spending demands, too, since you can’t spend what they want to spend just by taxing the top 1% of income earners. The numbers just don’t add up.”
Uh, er……..yeah! Why we debate philosophy here and at OTB vs raw math sometimes mystifies me.
“The line drawn by Republicans is that they’re opposed to raising the taxes of the top 1% of income earners. Hardly a populist position. I can only speculate that they’ve convinced themselves that if only you cut the taxes of the highest income earners enough it will produce a huge surge of economic growth. I just don’t see the evidence of that.”
I would modify that. Political reality caused them to figure out how to acknowledge the tax situation while shielding the majority of small business (read:job creators) owners. The $400K plus or minus probably was a reasonable cut at it, and I was stunned they didn’t take yes for an answer in round 1. But at least they got it in round two.
Here’s the deal. The Michael’s of the world will probably not change their behavior materially. He’s a talented solo artist. This probably shapes Michael’s worldview. But the Drew’s of the world, and so many business owners, will react, and not well, to the realities of payroll. The Dems are playing with fire and I don’t think Obama has enough experience to even know the risk he is taking on. Sorry Mr and Mrs Middle America.
And just a PS – Dave: I’d be careful about drawing definitive conclusions about tax policy changes in a full or semi-full economy vs today’s. Maybe Bush was wrong then. Maybe not. 9/11 was real. But today? Ad nauseum…………more tax? We don’t hire……