GOP Cooperating? Isn’t That Like Sharks Hugging?
Bill Kristol himself is noting that Republicans will have to actually act in a bipartisan way and compromise, instead of being totally obstructionist and just pretending to be the bipartisan ones:
“I think Republicans will have to give in much more than they think,” Kristol said. He believes Obama will be able to pass major, consequential legislation in his second term.
“Four presidents in the last century have won more than 51 percent of the vote twice: Roosevelt, Eisenhower, Reagan and Obama,” Kristol said. “I think there will be a big budget deal next year. It will be an Obama-type budget deal much more than a Paul Ryan-type budget deal.”
This seems to hold with Boehner’s apparent “maybe we could possibly see our way towards some kind of compromise perhaps” attitude as of late.
So, is this a Charlie-Brown-and-Lucy football-kicking fakeout? Are Republicans just acting in a compromising and bipartisan fashion only so they can later bug out, but claim it was Obama who bullied them into it? Or have conservatives actually figured out that their demographics are sinking, their histrionics are getting old and worn, and that maybe obstructionism isn’t working for them as well as they thought?
I think that, in private, they did not miss the fact that they not only lost the presidency and the Senate rather significantly, but they also lost the House—a trend that will only intensify. And that in order to keep even the House, they are going to have to start rethinking this whole batshit-crazy let-nothing-pass crap that’s been sinking the economy—now that the electorate has given them a not-so-gentle nudge to say, “Stop fracking around and start getting some work done.”
Of course, I am ever the optimist.
Could be a passive-aggressive, OK, we’ll do it your way for the next 2-4 years, but if that doesn’t work . . .
And it won’t, because so much stuff needs to be fixed besides returning the top 5% to Clinton’s tax rates. That’s only $100B/yr or so, not really going to make a dent in the $1.2T deficit.
http://research.stlouisfed.org/fred2/graph/?g=cIf
http://www.forbes.com/sites/rickungar/2012/07/20/the-truth-about-the-obama-tax-hike-proposal-how-both-sides-of-the-political-divide-are-playing-you-for-a-sucker/
has a good discussion on it.
Personally I’d prefer that they let the Clinton tax cuts expire permanently. Then take the first four years of that revenue gain and use it to fix the $1 trillion in infrastructure fixes that it is said that we need. Infrastructure investments provide a return on investment and that will also dry up employment.
Then use the increased revenue to pay off the debt.
I think guys like Krystol know that the jig is up. Their product was pure crap, and all they had was finesse. The finesse didn’t work. The demographics AND poor policy positions have caught up with them. They need to re-tool.
Having said that, they will do anything and everything to make the Democrats failures. Obama & Company need to make their plans. They’d probably like the stuff that I listed above, but know they can’t get that from the Republican House. So, they’ll have to compromise and hope that it’s enough to keep things going their way. But they shouldn’t have to compromise too much. The Bush tax cuts go away automatically, The negative affect on the economy will take months, the Republican constituents in the defense industry will be screaming their heads off for a deal. Obama ought to be able to get another half a loaf, or even 3/4s of a loaf, and this time, that ought to be enough.
Infrastructure investments provide a return on investment
maybe. We need infrastructure to replace $300B/yr trade loss to oil exporters, yes.
I don’t know what that looks like but it might be a lot of new nukes, solar, etc plus the civil reorientation away from gasoline to either natgas or electricity.
More mass-transit wouldn’t hurt I guess. 100,000 natgas buses could carry 25M people a day (500 person-trips each day) for a fleet cost of around $30B. Better investment than building 3 more supercarriers at least.
Natural gas is still pretty cheap, too:
http://research.stlouisfed.org/fred2/series/GASPRICE
but of course the more we burn the higher the price will go as oversupply is taken up.
But the fiscal deficit is just so big I don’t know how we’re going to get out from under it.
http://research.stlouisfed.org/fred2/graph/?g=cIq
blue line is deficit in social insurance contributions vs. outgo — $1.4T now.
(the red line is unemployment payments, showing it’s not a big factor now)
PPACA is going to add a lot more Medicaid spending:
http://research.stlouisfed.org/fred2/series/W729RC1
which is already $400B/yr.
Call me a pessimist, but I don’t think we’re going to be able to grow the economy to pay for this rising social spending.
We can cut the DOD back $400B/yr or so, but not since the mid-50s have we cut back more than 2-3%:
http://research.stlouisfed.org/fred2/graph/?g=cIr
and that was just the spin-down from a war.
What the system is going to have to do I guess is try to inflate away the old debt, but we can’t inflate away that without inflating away the $2.6T social security trust fund too.
The sober thing to do is close the $1.2T fiscal deficit over say 10 years.
Phase in a DOUBLING of the taxes the top 5% pay, $500B in new taxes.
Phase in a DOUBLING of the corporate income tax, this would yield $300B.
Phase in a $200B/yr CUT in DOD and we’ve got the deficit down to $200B and close enough to call it a day maybe.
Thing is, in 2022 the baby boom peak year (1957) is going to hit Medicare — the entire front half of the baby boom is going to be retired.
I think doubling the top 5%’s tax burden is enough, we need to raise taxes somewhere else, like perhaps doubling the FICA and Medicare taxes to keep these programs self-sustaining from payroll taxes and not general fund contributions.