Cantor and Co. Wimped Out at the Cliff's Edge, but There's More Scary Terrain Ahead

Categories: Schutze

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New Year's Day was great -- saw The Hobbit with son and girlfriend, came home to prime rib, what could be better? -- but I also spent a hell of a lot of time on the iPad trying to find out if I had fallen off a cliff yet. I'm not sure which was more death-defying -- the movie or real life.

The real-life drama goes on, of course, with a sequel coming up quickly in the debt-limit debate. But before this first chapter fades from view, I want to make one mental note for sure.

Note to self: At a key point in the debate, the House Republican position was a firm no to any tax increase for millionaires and a firm yes to cuts in Medicare and Medicaid. No to taxes for the very rich. Yes to cuts for the middle class and under. Got it.
We can debate the deficit.

Nobel laureate economist and New York Times columnist Paul Krugman had a piece in the Times last Sunday pointing out that the deficit issue has been the target of an enormous campaign of disinformation from the right. By conflating macro economics with Home Economics, the water-carriers for the rich have argued that the federal debt is an uncontestably terrible thing.

Krugman reminded us Sunday that public debt can be an enormously good thing when it's used to spur private-economic activity. But like I said, we can debate that. We can talk about it, just as we can and should debate the value of the federal social safety net and how to make it more efficient. If there's a way to pay less for aspirin, let's do it.

I don't think even the most ardent champion of the safety net is a champion of waste. In fact somehow it always turns out to be the other way around: It's the Republicans who wind up arguing that it would be cruel and unusual for the government to manage its medical care money efficiently, as in bargaining for better prices from drug companies, for example.

What we cannot debate is this: No to taxes for the uber-rich, yes to cuts to care for everybody else. That really tells the tale. That's the one we don't ever want to forget, because that was the brief moment in the din of battle when the smoke cleared and we saw whose ox they really wanted to gore and whose ox they were fighting to protect.

No reasonable person believes that issues of great magnitude can be resolved in an enormously complex society such as our own without meaningful compromise. Saying no to taxes on the very rich but yes to cuts for the middle class and poor is not even remotely an offer of compromise. It's a battle cry vowing death to the foe.

In that one brief glimpse of reality on the field, we saw the truth about the Eric Cantor/Paul Ryan Teaper wing of the Republican Party. They are not trying to resolve any issues of magnitude. They are working to protect billionaires, no matter what the cost to the country.

I don't know whether to be relieved or to gloat over their last-minute tail-between-legs retreat. For all their bluster, they quailed from the cliff when their toes got up to it. Were they stricken by conscience? Did they not want to be remembered throughout history as economic Benedict Arnolds? Or was it just that we saw their real game clearly when the clouds parted, and they knew they had been seen?

I have the same feeling I had at the end of The Hobbit. Damn. Now I have to wait for the sequel to find out.


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47 comments
Sotiredofitall
Sotiredofitall topcommenter

Big government Republicans fighting with big government Democrats; with both in the pocket of Wall Street elite posturing for the public pretending they care about the middle-class.   Need to get past the political party nonsense and see the core corruption of both.   

Former Sens. John Breaux, D-La., and Trent Lott, R-Miss., a pair of rainmaker lobbyists.  General Electric and Citigroup, for instance, hired Breaux and Lott to extend a tax provision that allows multinational corporations to defer U.S. taxes by moving profits into offshore financial subsidiaries. This provision -- known as the "active financing exception" -- is the main tool GE uses to avoid nearly all U.S. corporate income tax

transam19992003
transam19992003

The entire article is pretty much the stale Maoist class warfare and a bizarre argument (citing Krugman and his faux Nobel of all people) that 16 trillion in debt is not only not a bad thing, but in fact could be a good thing. Mind boggling. It could stir private economy stability? Oh Really? So when will this begin to happen? Any day now? When we reach 20 trillion? 2095? I would like to see a study done showing the credit scores of liberals vs conservatives. Liberals have to average 200 points lower. This is a classic example of why you can't even debate the left. It's like trying to talk to a monkey, you can't do it.

albert.finney000
albert.finney000

More spending, larger debt, tax hikes on everyone.

Success.

holmantx
holmantx topcommenter

This is what a financial collapse looks like. The Congress is just a microcosm of a societal slide. We are watching an outgunned minority say we don't have the money to pay for current operations much less the staggering amount of debt we now have to pay off, and the majority acting like blondes with checks left in their checkbooks bellering, you are holding out on me. We'll just have to learn the hard way.

In the end, the politicians had to stop the only horrifying event that truly makes them go limp with fear.

spending cuts.

The only thing they did last night was to put off for a few months, the draconian spending cuts which will electrify those who ride in the Public wagon, work for it, contract to it, or are retired from it.

and it's coming.  

When the Youth get old enough to realize how much we loaded them up with, man are they going to be hot! They won't pay, just like we didn't.  

holmantx
holmantx topcommenter

I started a joke, which started the whole world crying . . . today's reaction from the financial world:

The Pessimists Might Be Right on America - Fareed Zakaria, Foreign Affairs
What Did the the Cliff Deal Resolve? Nothing - Neil Irwin, Washington Post
Euphoria Over This Deal Will Be Short-Lived - Cyrus Sanati, Term Sheet
A Budget 'Cure' Worse Than the Disease - Charles Gasparino, New York Post
Economy Isn't Real Beneficiary of Cliff Deal - Mohamed El-Erian, Fortune
Why the Obama Tax Hikes Have Only Just Begun - James Pethokoukis, AEI
Crisis In Europe Is Going to Intensify - Desmond Lachman, The American
Stock Market Will Blindside Investors In 2013 - Paul Farrell, MarketWatch
Pitfalls Abound as Investors Chase Riskier Yield - Tom Lauricella, WSJ
Demography as Destiny: Is America Doomed? - Joel Kotkin, Reuters
Nothing Is Certain Now Except More Debt and Taxes - David Malpass, WSJ
Markets Long Since Over The Fiscal Cliff - Ironman, Political Calculations
The 10 Weirdest Parts Of The Fiscal Deal - Brad Plumer, Wonkblog

dead cat bounce . . .

everlastingphelps
everlastingphelps topcommenter

Let's look at the other side of the aisle.  Massive raises in taxes for everyone making more than "$250,000" (but probably less) even though the president admitted that he knew raising taxes would hurt the economy but still wanted to do it out of "fairness" and an unlimited ability for the Executive to raise the debt ceiling by fiat.  

Obama ended up only getting a symbolic raise on people making more than $400,000 (which won't generate any significant revenue, because people at that level can either shelter their money or simply stop earning) and kicked the can on the debt ceiling down the road 2 measly months -- which is when the whole fight starts all over again.

You know what that is called?  Compromise.

Oh, and now Obama is spending more millions of our money to fly BACK to Hawaii, because he couldn't get the job done before Christmas (never mind that it should have been "done" almost four years ago, which is the last time his henchman Reid actually passed a budget.)

Myrna.Minkoff-Katz
Myrna.Minkoff-Katz topcommenter

Observer: Please turn off auto-refresh.  My half-finished comments are deleted every time you do that and I have to start all over again.  Thanks.

ShadowsAndDust
ShadowsAndDust

...."we saw the truth about the Eric Cantor/Paul Ryan Teaper wing of the Republican Party. They are not trying to resolve any issues of magnitude. They are working to protect billionaires, no matter what the cost to the country."


Jim, this is the grand distraction... or the big lie.  The top earners are already pulling the wagon.  Confiscate all of their wealth and it wouldn't even put a dent in our fiscal woes.  Until the statists are willing to make deep cuts in the Federal Dept. of Free S!#t, all we can do is wait for global realities (i.e., the Chi-Com Capitalists) to push us into debtors prison.  A long term fix will also require a major rethinking of defense spending.  This constant libtard harping about Old Man Potter not paying his fair share gets us absolutely nowhere. 

Myrna.Minkoff-Katz
Myrna.Minkoff-Katz topcommenter

If there was any doubt as to the fracturing of the woeful GOP, the House vote put an end to it.  Boehner and Ryan ended up on the YES side, with Cantor and the hard-core Tea Party voting NO.  At least, the Senate decided to grow up and compromise, coming to a 90% YES approval of the deal.  The far right and the far left need to stop the "My Way or the Highway" mentality if we are to dig ourselves out of the mess Bush left us in.

holmantx
holmantx topcommenter

@albert.finney000 Deficit spending once was largely for investments — building infrastructure, winning wars — which benefited future generations, so government borrowing appropriately shared the burden with those generations. Now, however, continuous borrowing burdens future generations in order to finance current consumption. Today’s policy erases “the distinction between investing for the future and borrowing from the future.

It is now as clear as it is unsurprising that most Americans will be spared the educational experience of “fiscal cliff”-related tax increases and spending cuts, which would have been a small but instructive taste of the real costs of the entitlement state.

One December winner was George W. Bush because a large majority of Democrats favored making permanent a large majority of his tax cuts. December’s rancor disguised bipartisan agreement: Both parties flinch from cliff-related tax increases and spending decreases. But neither the increases nor decreases would have tamed the current $1 trillion-plus budget deficit nor made a discernible dent in the 87-times-larger unfunded liabilities of the entitlement state.

This state cannot be funded by taxing “the rich.” Or even by higher income taxes on the middle class. Income taxes cannot fund the government liberals want, and they dare not seek the consumption and energy taxes their entitlement architecture requires. Hence, although Republicans are complicit, Democrats are ardent in embracing decadent democracy. This consists not just of infantilism — refusing to will the means for the ends one has willed — but also of willing an immoral means: conscripting the wealth of future generations.

The media, which often are the last to know things because their wishes father their thoughts, say the tea party impulse is exhausted. Scores of House Republicans and seven first-term Republican senators will soon — hello, debt ceiling — prove otherwise.

Our Decadent Democracy - George Will, Washington Post

man that guy is good!

JimSX
JimSX topcommenter

@holmantx 

Translation for all of the above: "We lost."

everlastingphelps
everlastingphelps topcommenter

Oh, and don't forget that Obamacare has ALREADY raised taxes on nearly everyone, including those making less than $250K, and he also raised taxes on everyone through their SS withholding as part of this deal.

Crack head economics.  That's how we're running the country.  "If I can just get another $10 for another rock, I'll be motivated enough to get a job and actually PAY for my crack!  Yay!  I got another rock!  Let's borrow another $10 for another rock!"

JimSX
JimSX topcommenter

@ShadowsAndDust 

You watchin' the news at all, man? Old Man Potter just got a haircut. I'd say the libtard harping not only is getting us somewhere: it's the only thing that's getting us anywhere. Oh, and we won the presidential thing. Don't forget that one.  Tell me again: where was it you were going? 

Montemalone
Montemalone topcommenter

@ShadowsAndDust No.

We had the sitch in hand in the 90s. Tax rates were sufficient to fund gov and the budget was "balanced" (I know that's a paperwork fiction, but nevertheless). Then we had the big giveaway and unfunded revenge wars, where the rich folks kept getting richer and everyone else notsomuch.

It may not solve the problem, but getting back to more tax income to fund government, and maybe getting around to also eliminating the giveaways to the rich in the form of removing restrictions on Medicare and VA from negotiating better deals with repub donors, I mean the health care industry, we can cut spending too.

ScottsMerkin
ScottsMerkin topcommenter

@Myrna.Minkoff-Katz well i liked your comment until you bring up Bush, its been 5 years, let it go.  The shit they are trying to fix should have been looked at when Obama took office, not 5 years later.  If these asshats would look at actually solving the issue we wouldnt have to extend these tax breaks/cuts every fucking year.

WhiteWhale
WhiteWhale

@JimSX When is Obama going to deal with his spending problem? 

ShadowsAndDust
ShadowsAndDust

@JimSX Well, once again.... without spending cuts explain how taxing the "wealthy" comes anywhere close to solving our fiscal problems.  As for the presidential thing, I'm not ready to exalt that branch of government over the other two.  We have dug ourselves a deep hole and everyone has their fingerprints on the shovel.  

everlastingphelps
everlastingphelps topcommenter

@Montemalone @ShadowsAndDust And we had to "go over the cliff" and shut down the government to keep Clinton from spending the money that "balanced" the budget that time.

We've had a spending problem the entire time, and only one side of the aisle is willing to admit it.

WhiteWhale
WhiteWhale

@ScottsMerkin @Myrna.Minkoff-Katz She can't let it go because then she would have to deal with the fact that the overspending must stop and that democrat banker fat cats like Bernie Madoff, Jon Corzine, Timmy Geithner put the economy in the toilet.

Myrna.Minkoff-Katz
Myrna.Minkoff-Katz topcommenter

@ScottsMerkin Scotty, Bush and his merry shmendriks got us into two disastrous wars which ruined our economy.  That's an indelible part of history that can never be written out of the books.

albert.finney000
albert.finney000

@holmantx @JimSX

Jim is glad his taxes are going up, that's a trouper

WhiteWhale
WhiteWhale

@JimSX @WhiteWhale I wish it was an Obama problem.  We have a massive deficit problem, a crony capitalism problem, a corrupt Chicago Machine problem and an out of control government problem.  You claim the Republicans are for the uber rich then why are the majority of the uber rich crony capitalists Obama supporters?    Weren't Obama, Biden and Reid elected to solve these problems not award huge sums of money to their fat cat donors and bundlers?

ScottsMerkin
ScottsMerkin topcommenter

@JimSX @WhiteWhale I think people with an Obama problem will deal with it when people with a Bush problem get over that

WhiteWhale
WhiteWhale

@JimSX @WhiteWhale Obama tax increases will do nothing to cut the deficit.  Especially since Obama wants to spend and regulate more.

GuitarPlayer
GuitarPlayer

 Yeah the ones who were not in Iraq. Stupid logic.

ScottsMerkin
ScottsMerkin topcommenter

@Myrna.Minkoff-Katz @ScottsMerkin also, Im glad to know that you are cool with sitting back and doing nothing when someone attacks our country and kills thousands of innocent Americans.

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