Posted on 11/16/2012 1:28:01 PM PST by SoFloFreeper
First off, it’s not a “fiscal cliff.” What we’re slated to hit as of New Year’s Day, as the Wall Street Journal notes, is a tax cliff. Our fiscal cliff, which drops off into a far deeper canyon, is what looms because of our $16,000,000,000,000 debt and the runaway entitlement spending that fuels it — Medicare, Medicaid, (and now) Obamacare. In truth, the debt deal passed in the summer of 2011 — which the press now says we must scrap if we are to avoid the “fiscal cliff” — was designed to postpone our going over the (actual) fiscal cliff.
In poker, if you have a weak hand, you have two choices: fold or bluff. The problem for the Republican House is that this is like a crooked game of 7-card stud — most of the cards were dealt face-up, and a couple of the others are marked. In short, everybody can see that the GOP has a weak hand. Bluffing would be like trying a fake field goal when down 6 points with 3 seconds left in the game. Nobody would buy it. Obama, meanwhile, has a strong hand — as everyone can also see — and he’s not bluffing.
The reason why Obama has a strong hand is not because he just won a whopping 50.6 percent of the popular vote and 26 of the 50 states. No, he has a strong hand because what will happen on New Year’s Day if no deal is reached is that taxes will be hiked about $4 for every $1 in spending cuts. More specifically, every taxpaying American will see his or her taxes rise, while defense spending will be rather dramatically cut. Do you think Obama could live with that?
The only thing better for Obama would be to have the tax hikes and defense cuts kick in and be able to blame the GOP for their happening: “As I’ve said all along, we need a balanced approach. But Republicans continue to put the concerns of the rich ahead of the concerns of middle-class Americans who are struggling. So, while I regret that a deal wasn’t possible at this time, I still hope that we can get both parties to see that everybody’s gotta compromise a little bit and can’t always get everything they want.” For Obama, this juicy combination of tax hikes, defense cuts, and blaming it all on an ostensibly recalcitrant GOP, would be like hitting the jackpot.
Obama implicitly suggests he wants to lower the 4-to-1 ratio of tax hikes to spending cuts, since he says he wants to prevent the scheduled the tax hike on the middle class. The GOP isn’t going to be able to push him much further than he claims he wants to go, especially since he’d probably actually prefer to keep the ratio at 4-to-1.
So, my advice to House Republicans is to fold — or at least don’t raise the ante. Don’t push your luck, and don’t pick this moment of weakness as the time to seek a “grand bargain.” Make Obama own this. You don’t have to vote for raising taxes on the wealthy (they’ll be raised anyway); just vote to stop the tax hike on the middle class. If Obama’s tax hikes on the wealthy hurt the economy like you say they will, it’ll be crystal clear who’s to blame. Fold and wait for better cards on the next deal. (They can’t be much worse.) Nothing decided this time around will do much of anything to avoid our going over the real fiscal cliff anyway. Wait and risk your chips when the real drivers of our debt are actually at stake. That’s the smart, conservative play.
Correction of my own comment: the tax hikes and spending cuts combined total about $800 for the first year, with each “automatic” measure being near 50% of the total (for each of the first years). Closer to 50:50 than 4:1.
But the Democrat Administration has already proposed continuing the tax breaks for middle class taxpayers while sticking it to the “rich” (still not right, of course). Could be closer to 10:1 spending cuts:tax hikes. Anyway, those few of you in the private sector need to help us see to it that representatives don’t budge on the spending cuts. It would be possible to get all of the spending cuts done while seeing less of the proposed tax hikes (expiring tax breaks).
CBO Report: Avoiding the Fiscal Cliff Costs Over $1 Trillion
http://www.freerepublic.com/focus/f-news/2959776/posts
Those crafty Republican bastards deliberately lost the election so they could pin all the blame for the awful economy they created on our poor victim President Obama.
Well, they won’t get away with it. No matter what happens, it’s all STILL BUSH’S FAULT!!!
People will vote with their wallets and feet. Relocation of wealth from liberal states to 'right to work' and anti-obamacare states is right on schedule and will continue.
Eventually, the discrepancy in growth and job creation between 'red' and 'blue' states will be too large to ignore. As long as GOP (or whatever new name they may choose for their conservative party) Govs. and legislators stand firm, their states will serve as the models for the entire country to follow for recovery. Conversely, the policies exemplified by super-blue states will end up on the ash heap of history.
It might take decades, but it's the only way.
Yeah just like Detroit & California, after there were no more Republicans and the Democrats ruined it, people wised up and all became Conservatives!!!
Oh Wait!
I have no idea who omugabee is.
I have been thinking about this for awhile. Let him have his way.
Although, the pubbies have to make it as clear every step of the way as what they do not agree with and why they believe it is going to bad for Amreica.
keep explaining how the alternate plan would work even though that is not the way 0 is going.
Repeatedly say how 0 owns it.
It’s so hard to cut domestic spending, it might be worth it to accept the defense cuts just to get it done. If there’s an emergency later that requires the military, it’s easy to raise defense spending.
Raising taxes is not a good thing, but it would give the Republicans an issue to run on in the next election. People believe them when they say they’re going to cut taxes.
Personally I’d like to see the spending cuts go through, but not the tax hikes. As a middle class taxpayer, I’d rather all our taxes go up at the same time than just taxes on the so-called rich. Closing deductions and loopholes no matter who they apply to is fine though.
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