The Obama administration’s real problem is existential: What if it gets what it wants, but then finds that either it or the country really is uncomfortable with what it got?
Take energy. We were long ago lectured by hot-house administration plants, including the president himself, about the desirability of high-cost energy in curbing fossil-fuel use and making subsidized wind and solar power and electric transportation competitive. By midsummer, the technocrats may get their wish with $5 or even $6-a-gallon gas (not quite as high as Secretary Chu may once have wanted). Will they say, “But $7 or $8 would have been more truly European”?
And if we were to go back to the “Clinton tax rates” as the president repeats as a daily mantra, then what? The deficit would not drastically be cut, given the huge rates of borrowing, and the budget would not even come close to being balanced. Would the president then come back with, “We need to raise taxes a lot more than just those pay-your-fair-share Clinton-era rates”?
And Obamacare? Once it passed, there were new taxes leveled to pay for it; health-care premiums are rising; the latest squabble with the Catholic Church reminds us that few Americans had any idea about what was in the 2,000-plus-page bill; and soon Medicare will be trimmed to pay for it. In reaction, will the administration say, “We need a truly comprehensive Obamacare II bill?” or “Next round we will offer you a single-payer plan”? or “We had too little government control the first time around”?
Abroad, what comes after “reset” and “outreach”? Outreach 2.0 in which we issue another four to five deadlines to Iran? Reset 1A in which we reapproach Putin from a different direction, or reopen again the reopened and reclosed embassy in Damascus? Leading from way, way behind?
What comes after “the most transparent” administration in history? No more super PACs or a return to public financing of campaigns — in 2016? The revolving door for only ten departing officials, but not 15? Will there be post-class-warfare with fatter cats, corporate-jet fleet owners, “the 10 percenters,” and lots of points at which you need to stop making money? Alligators, moats — and piranhas? Punish all of our enemies?
"And if we were to go back to the 'Clinton tax rates' as the president repeats as a daily mantra, then what? The deficit would not drastically be cut, given the huge rates of borrowing, and the budget would not even come close to being balanced."
I'm not entirely sure that's true. During the four years (FY1998-2001) when we last balanced the budget, receipts ranged from 19.5-20.6% of GDP and spending from 18.2-19.1% of GDP. Just to put it in round numbers, we could balance the budget if we had receipts at 20% of GDP and spending at 19% of GDP.
In FY 2011, receipts were 15.4% of GDP and spending was 24.1%.
For FY 2012, estimated receipts are 15.8% of GPD and spending is estimated to be 24.3% of GDP (please note that this increase in spending is happening while the Republican Party controls the House of Representatives - go figure).
So going back to 20% of GDP in receipts would, in fact, "drastically" cut the deficit - it would halve it. But actually balancing the budget and having a small (1% of GDP) surplus would also require dropping spending from 24.3% down to 19%. Just as the increase in taxes from 15.8-20% is a big jump, that's a big cut.
But since no one - including neither of the two men likely to win the Republican nomination, much less the current President - wants do to BOTH - it's a moot point. Neither Romney nor Santorum has the slightest interest in cutting spending to 19% - much less all the way down to something slightly lower than 15.8%.
Some of the gap between spending and receipts might be reduced "automatically" as the economy improves, tax receipts increase and spending on the unemployed and poor decrease. That seems to be what all three (Romney, Santorum and Obama) of these guys are hoping for - an economic rescue that doesn't require much in the way of difficult choices.
Reply to this commentLinkReport AbuseOh, there will always be more successful people to punish and discourage, more working class folks to impoverish to delight his wealthy green-buddies, more campaign contributors and public union supporters to reward from the public purse, more people to push into government dependency to lock in their votes, more votes or contributions to buy from interest groups like the trial lawyers, more taxpayer-funded vacations to take. As Adam Smith said, “there’s a lot of ruin in a country.” Give him time. I will link to this from my Old Jarhead blog.
Robert A. Hall
Reply to this commentLinkReport AbuseAuthor: The Coming Collapse of the American Republic
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I would be thrilled to go back to Clinton-Gingrich era tax rates if we also go back to Clinton-Gingrich era spending levels.
Reply to this commentLinkReport AbuseWait.... we went from the top 1% who are evil to the top 10%?? Gosh, that is kinda hitting home. I have to sit back and think if I'm evil because I'm in the 10%. Maybe.... if I just stay under the top 10%, say the top 10.1%. Yeah that works at least until we rase the debt limit again in September.
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