Skip to comments.Winning Ugly: Obama and the Fiscal Cliff
Posted on 01/04/2013 5:53:30 AM PST by Kaslin
By all accounts, President Obama won the fiscal cliff showdown. Why anyone would take much pride in this kind of "win" is beyond me. It's a bit like being the least filthy toddler in the mud pit.
One of the main reasons Obama won, according not only to Obama but an at times cheering press, is that he had a mandate. He ran on the need for the wealthy to "pay their fair share."
To his credit, Obama never said raising taxes on the "rich" will solve all of our problems. What he did say, however, is that he couldn't in good conscience ask seniors and college students to take a hit from budget cuts without asking the wealthy to pay their fair share. He wanted "shared sacrifice" and a "balanced approach" because we're "all in it together."
Here is what Obama said in his weekly address on July 16, 2011: "The truth is, you can't solve our deficit without cutting spending. But you also can't solve it without asking the wealthiest Americans to pay their fair share."
"This is not class warfare," Obama said in September of 2011. "It's math."
He continued: "Either we ask the wealthiest Americans to pay their fair share in taxes, or we're going to have to ask seniors to pay more for Medicare. We can't afford to do both."
And here's what he said just days after he was re-elected: "But as I've said before, we can't just cut our way to prosperity. If we're serious about reducing the deficit, we have to combine spending cuts with revenue. And that means asking the wealthiest Americans to pay a little more in taxes. That's how we did in the 1990s, when Bill Clinton was president."
Now, I have plenty of disagreements with all of this. The president seems to think that if he calls class warfare "math," it's suddenly not class warfare. Also, the man's version of the last two decades of economic history has always struck me as at best flawed and more properly speaking barmy. During the campaign he assiduously worked to give the impression that the 2008 financial crisis was caused by George W. Bush's tax cuts (something even the official studies of the crisis never suggested) and that the 1990s economic boom, which didn't even begin on Clinton's watch, was launched by Clinton's tax hikes.
Also, the idea that the rich hadn't been paying their fair share is at least debatable. When Obama took office in 2009, the richest 5 percent of Americans paid almost 40 percent of all federal taxes, and the richest 1 percent paid 22 percent, according to the Congressional Budget Office. If you count only federal income taxes, the top 5 percent and top 1 percent paid, respectively, 59 percent and 37 percent.
But none of that matters. Obama was re-elected on a twofold promise. Part one was to make the wealthy pay their fair share. Part two: fix our debt crisis, which Obama himself has conceded is chiefly driven by entitlement spending. Right or wrong, he's done part one, according to the standards he laid out in the campaign (although he did want to raise taxes on incomes starting at $200,000 for individuals and $250,000 for couples but settled for $400,000 and $450,000, respectively). The fiscal cliff deal raises $41 in taxes for every dollar it cuts in spending -- not just by raising rates on the wealthy, but also by raising payroll taxes on everyone. The revenues from making the rich pay their fair share will slow the sinking of America into an ocean of debt about as much as throwing all the swizzle sticks off the Titanic would have delayed the inevitable.
Heck, the deal actually increases spending and the national debt. So clearly, promise number two remains unfulfilled.
Will Obama act on the second part of his mandate? It doesn't look good. He's now claiming he already cut $1 trillion in 2011, largely by "cutting" spending no one ever planned to spend. If I plan to build an orbital Death Star for $10 trillion and then think better of it, I've cut $10 trillion, according to Obama's math. His own White House Office of Management and Budget says spending went up $147 billion last year.
Moreover, at the last minute, before the deal was even agreed to, Obama insisted that any future deficit-reduction package must include even more tax hikes.
It's clear that the Republicans mishandled this whole fiasco. If they were going to lose on tax hikes anyway, they might as well have lost early and spent the last month pounding Obama on the second part of his promise.
Meanwhile, if the press corps can take a break from celebrating Obama's victory over those crazy Republicans who want to keep us from going bankrupt, they might start asking Obama about the rest of his mandate.
This statement is based on the assumption that nobody will change his economic behavior based on higher tax rates, even though all experience shows that higher rates generate less revenue than calculated. Secondly, the statement assumes that spending will actually be cut, even though all experience shows that promised spending cuts do not actually materialize, and even though "cuts" are defined as "less of an increase than we otherwise might have had."
The whole discussion, at every level, not just from Jonah, reminds me of the theoretical-physics joke about "assuming they are spherical chickens in a vacuum."
Obama taxes = Entitlement Spending
The fiscal cliff deal raises $41 in taxes for every dollar it cuts in spending
This is the definition, then, that Obama uses for "fair and balanced" legislating. So, by his own definition, in the debt-ceiling deal there needs to be $41 in immediate spending cuts for every dollar the ceiling is raised.
Stare decisis is the rule of the land. You won, Mr. pResident, now live with the consequences.
Goldberg has a polite way of putting it. I would have used an analogy which has something to do with tinkling over Niagara Falls.
I found it really stupid of anyone to state that this bill raises taxes by X amount of dollars.
They have no idea how much more tax revenue will be created.
I know they’re using a static model, but really, can anyone honestly say that the static model is accurate?
No, they can’t. But, instead of calling them dishonest, we should hit them where it hurts. Attack their intellectual capacity.
This was all settled by the election.
The American people (low-information or not) voted for higher taxes on producers, continued growth of Government, and no cuts (or even a potential increase) in entitlement spending.
The results at the ballot box were pretty clear. Were it not for GOP control of state houses and some clever gerrymandering, the Dims would probably have the House too.
Wake up and smell the pablum, a majority of our fellow citizens voted for this.
All the available evidence indicates that the static model inaccurate. Anyone who works from another assumption is either dishonest, ignorant, stupid, or all the above.
In the case of Jonah Goldberg, who I know is a smart man - with some real credentials as evidence, unlike certain presidents - I would say that it's not that he's actively dishonest, but that, in haste to produce copy, he simply starts with the perspective handed him by the government spokesmen.
We can call this "intellectually lazy" without being uncharitable, I think, and it's a very common problem with writers who have to churn out copy quickly on a current topic. It doesn't make them "wrong," necessarily, but it makes them "not helpful."
Or easier to say - Bread and Circuses.
Silver lining in all of this: “Bush tax cuts” now permenant for 99% of us. That’s not nothing.
But, I think this may be the beauty of what the Republicans have done here: NO ONE in this country, has seen their Federal taxes INCREASED in the past 16 years.
When the working part of the pablum sees this payroll tax hit, they may become a little less enthusiastic about "tax increases"... on anyone.
The best thing is.... INERTIA (who is always your friend in Washington)... is on OUR side now. If they do NOTHING, spending will be cut.
Even if they cave on the debt ceiling increase... Spending WILL be cut... unless they ACT to change it.
I'm starting to think, it was a brilliant move to de-couple the two; taxes and spending. I'll let you know for sure two months from now.
I agree... That is a BIG deal.
We are all.. (naturally).. operating on the assumption that past experience will continue, ie: we got tax increases for NOTHING.
But, really... we don't know yet. In all our past screw jobs, we never had existing enacted legislation to cut spending waiting in the wings.
I like our chances this time. Maybe Lucy really will hold the football! ;-)
The author is not even nearly cynical enough to parse Barky here. Only one route to understanding will suffice:
- What does it want?
- Does it want it some particular way?
- When does it want it?
- Are there other conditions and wants on its list?
- What is it willing to do, or not do, or abandon, or forget about conveniently, in order to achieve what it wants right now?
One has to parse these guys the way the CIA would do, in terms of their operational environments and operational ends when they make these operational statements that have no truth content per se but only payload potential (think "scumware") that the operators want someone to consume for the operators' benefit.
Or, "Panem et Circenses!" It has that classical gazoot -- sort of like "Noxii ad bestias!!"
Of course. But they don't have an automatic cutoff date anymore. If you want to go on about everything that was wrong with this bill, fine. No argument from me. Just don't ignore the silver lining.