Monday, August 01, 2011

Good Deal? Bad Deal?

The deal which is going to Congress for approval seems to have pissed off everybody, so it must be a pretty good deal, although it looks mostly like nonsense to me. Well, of course the whole subject is nonsense.

Republicans were insisting on “spending cuts equal to any increase in the debt limit,” but how they can consider that achieved is completely beyond me. They got a spending limit increase of $2.7 trillion over an 18 month period and a spending cut of $2.7 trillion over ten years. The spending cuts don’t begin until 2013, so the debt limit will have to be raised again before the spending cuts even go into effect. What are the silly-ass Republicans crowing about?

Not to mention that this nation only budgets one year at a time, so ten year spending cuts are entirely fiction. Spending cuts that take effect in 2013? Give me a break, we don't even have a budget for 2012 yet.

Republicans are still prattling about a balanced budget amendment as if they thought it could pass either house of Congress, when anyone with half a brain knows neither house of Congress will achieve a necessary super-majority to pass it, and even if they did there is no way in hell that the states would adopt it.

FWIW, I don't really care about the deficit at this point. Later, yes.

Democrats are divided between condemning Obama for not getting tax increases, like that would be a good thing in this economy, and cheering because he will be in a position to terminate the Bush tax cuts with a veto at the end of 2012. Except that those tax cuts run to the end of 2012 because Obama extended them for two years and if he vetoes them he raises taxes on the middle class more than he does on the rich. That doesn’t look like a Democratic victory to me.

I don't care about the Bush/Obama tax cuts, either. I care about jobs.

What we have is spending cuts of $2.7 trillion which, assuming that the economy remains weak, amounts to about a 12% reduction in our deficit. That certainly is not sufficient to get the “confidence fairy” to wave a "magic jobs wand” over the economy and create a lot of jobs and, since the deficit and taxes are unchanged from last year, it means that election rhetoric will be about the deficit and “tax reform,” meaning lowering the upper tax rates instead of raising them, instead of about job creation and other “Main Street” issues.

In other words, Republicans did not win and neither did Democrats, but the American people lost, as they always do.

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