Even if most people want to avoid fiscal cliff, remember: all politics is local…

December 26, 2012

I’m guessing the reason lawmakers have not been able to come together on fiscal cliff negotiations is that even though a majority of people in the United States might want to avert the drastic measures of automatic spending cuts and raised taxes for all, all politics is local.

Each individual legislator plays to his constituents, or more to the point, he or she plays to the powers that be who help in the campaign or who have the power to excerpt pressure. Since campaigns are more about raising money than directly appealing to the masses this is what we get — gridlock on the issues.

The Republican Party used to be comfortable in being conservative and pro business interests but now is deeply divided, adding to the paralysis on the fiscal cliff issue.

(I think the current division is an outgrowth of the GOP’s program of appealing the ignorant, the bigoted, and narrow-minded interests, all in the name of simply getting votes. The program worked well in the beginning because it did get votes but now the party has reaped the whirlwind.)

Also this all may be a game of poker. The Republicans who are holding out may be bluffing. Well I guess that is a given.

And this may not be such a good metaphor but maybe at the last minute, New Year’s Eve, both sides will fold — realizing they both have a losing hand. Another stop-gap measure to kick the can down the road for someone else to deal with.

(You will recall the automatic spending cuts and tax hikes were enacted in legislation that was a result of a stalemate in budget talks that produced a lowered credit rating for the federal government, and since our government operates on borrowed money, the credit rating is crucial for survival.)

With Obama’s fairly decisive re-election victory (electoral college wise especially) it would seem he and his party, the Democrats, have the better hand.

In my posts on the subject of the fiscal cliff I have been critical of both sides. My idea is that we all have to share in getting our nation’s fiscal house in order (to the extent that such is possible), rather than do it by a class basis (the Democrats have wanted to spare the pain for the middle class and the Republicans have refused to raise taxes on the rich — although the GOP is now divided on that).

So what happens if the New Year begins with no agreement and then the automatic spending cuts, which fund social programs and lucrative government contracts for business, and the raising of taxes on virtually everyone goes into effect? As I said in my last post on the subject, maybe then there will be enough pressure from the public or from those who legislators listen to in order for something to give. So falling over the cliff may resolve the problem. I certainly do not know.

HAPPY NEW YEAR to come!


Sliding off the fiscal cliff may be the only answer in fiscal crisis…

December 22, 2012

And perhaps the best way to resolve the fiscal cliff dilemma is to tumble over it and see what happens. The deadline for action is Jan. 1.

If automatic spending cuts go into place, cuts neither Republicans nor Democrats will like, not to mention the general public, and virtually everyone’s taxes are raised, then maybe there will be some public pressure to do something. So far, I have not really noticed any public pressure.

The problem is that both sides are wrong. You can’t on the one hand just keep spending and spending and even at an ever higher rate while revenues diminish. And you can’t climb out of a financial hole without raising revenue.

I think most economic experts say that simply cutting alone won’t work.

President Obama’s decisive re-election (although Romney did get 47 percent) seems to indicate that the majority of the electorate does not want to scrap public spending, probably in particular on things like Social Security and Medicare.

Meanwhile, a story teaser in the Wall Street Journal (I don’t subscribe so sometimes I just get the headline or first paragraphs) said that the Republicans can’t come to an agreement on fiscal cliff talks because much of their membership refuses to do anything that would lead to increasing taxes on the rich (“the rich” I think has a flexible definition, but really in this country if you make more than $100,000 per year, you are at least approaching rich, even though others make millions and billions).

And I personally think the refusal to hike taxes on the rich is senseless, but maybe no more senseless than refusing to hike taxes on the middle class.

Let’s simplify the tax code first, reducing  the myriad of loopholes and gimmicks, and then maybe we won’t have to raise the rates as much as we might have to otherwise, and maybe, just maybe, there might be more equity in the tax codes and hopefully more support of the whole system.

And let’s restore manufacturing as our base. The service economy and living on housing bubbles just didn’t work.

P.s.

Probably there will be a last-minute stop-gap action. That of course will not solve the problem. Then again, it will not hurt, I wouldn’t think. It just all seems so pointless, or futile.

 

P.s. P.s.

Oh, and that thing about taxing the rich sometimes hits small businesses unfairly because they file their taxes as individuals is confusing to me. I mean maybe small businesses that do that need a better accountant. There must be some advantage to them by incorporating or going to some other such measure. But then again, what do I know. Nothing.

 


One week since Sandy Hook shooting and on following the fiscal cliff debate

December 21, 2012

UPDATE:

My immediate reaction to the call today by the National Rifle Association for the federal government to put or mandate there to be armed personnel in every school is that, well, if it is going to be that dangerous for kids in school, as our recent history suggests, then such may well be needed. But it seems strange that such a right-wing organization suddenly is for a federal mandate. Also it is the free flow and easy access to firearms, most notably the ones designed to kill people in mass, that the NRA has fought so hard to keep up, that in part has led to this situation.

The NRA also called for something to be done about all those video games that promote violence. I agree, freedom of speech notwithstanding. But again it seems strange a right-wing organization would want more government control.

But hopefully the powerful gun lobby has awoken to the fact that the current situation is intolerable and also that if it does not become part of the solution it will be nothing more than part of the problem (and really I doubt the NRA could ever be part of the solution).

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I usually don’t combine topics in these posts, but lack of time (I have a real job) forces me to do so:

First: we are now at or almost at (as I write this) the one-week anniversary of the horrendous Sandy Hill school shooting —  a whole class of first graders murdered with each victim sustaining multiple wounds from a military-style assault rifle and the shooter’s mother and several school staffers being killed and the shooter committing suicide.

President Obama and others are calling for action on at least controlling or eliminating the trade of these what some call weapons of mass destruction.

Meanwhile, I read that there is a run on gun sales — gun lovers fearing their whole supply will be cut off.

And then we have these people who claim that what we need to do is arm teachers and other school personnel. On that last one, I shudder to think what it would be like with everyone going around wild-west style with a six-shooter hanging from their hip.

(And I heard on the radio news that a man in Tillamook, Or. somehow lost track of his handgun in a movie theatre. It was said to be loaded and not on safety. Subsequently, two young boys discovered it when they went to sit down and it dropped onto the floor. Fortunately, there is a happy ending. They reported it to adults. No one was hurt. But think: it could have gone off when it dropped. One of the boys could have picked it up and shot himself or his friend or someone else. Everyone carrying around a gun in order to shoot back. No, maybe not such a good idea.)

Seriously, I know that many schools these days do have their own armed police. That makes some sense. But c’mon everyone carrying?

I can only hope that something good can come out of something so evil. A safer America.

I will allow, though, that if our leaders and our law enforcement personnel cannot do better in protecting us from gun-wielding crazies (and I realize you can never stop everything bad), people will come to feel they must take the law and their protection into their own hands. So hopefully those in power will do what is best and not bend to the will of the commercial interests who profit from fear and maybe a morbid fascination with deadly weapons.

And I suppose most gun lovers will sense from this that I am anti-gun. Not true, necessarily. But if what happened a week ago does not cause you to think something must be done to control the sale and availability of weapons, especially the availability to law breakers and the mentally unbalanced, then, well I just don’t know what to think of that.

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Second, the fiscal cliff:

I have not really been following the drama of the fiscal cliff talks closely. Mostly I just read the headlines. But it seems to me it comes down to this: do we, the public as a whole, think we have to keep our nation’s finances in check and do we need to pay our bills and quit making our national debt expand exponentially (in part by borrowing money to pay interest on borrowed money) until we reach inevitable financial ruin?

If the answer is yes, then it would seem that on the question of taxes, we all have to pay our fair share. The problem is that many of us maybe want someone else to pay that fair share. And yes, the rich can afford to pay more, that is why they pay higher rates on their income (or are supposed to). I know it gets complicated and sometimes the super rich, such as Mitt Romney (remember him?), end up paying a lower rate than their income would suggest, due to loopholes.

I admit I would just as soon preserve the status quo for myself. So I would not go too far to push for change. But I can accept there might indeed be change. But I would only willingly go along with it (I actually would have no choice) if I thought everyone shared. I think that would mean closing one heck of a lot of tax loopholes, all of which were sold on the premise that they promoted something good, such as Romney’s investment income that is supposedly used to do great things for the economy, to include expanding the workforce, even though he is famous for firing people — you know, downsizing — in the name of making companies run more efficiently and making more money for their investors.

Certainly things such as Social Security and Medicare, which so many people depend upon, have to be preserved, but at the same time I imagine you can’t rightfully take them off the table if you are serious about deficit reduction.

There are many choices to be made. Many tough ones. But here is a choice:

Waging war primarily in the name of geopolitical strategy masquerading as self defense versus caring directly for our own population. Which would you choose?

And my time for writing has run out.

P.s.

Here is a perspective on the right to keep and bear arms and the Second Amendment: http://www.thedailybeast.com/articles/2012/12/18/gun-rights-advocates-should-fear-history-of-second-amendment.html


On the fiscal cliff: What is wrong with paying our bills and paying as we go?

December 2, 2012

Blogger’s Note: After posting this I realized that I had not mentioned the part of the “fiscal cliff” situation in which if the president and congress fail to come to an agreement by the new year that a combination of automatic spending cuts and an expiration of tax cuts will take effect and many think that would send the economy over the fiscal cliff, as it were. Since partisans in congress don’t want to compromise for fear of looking politically weak and losing votes from what they consider their base, they passed a law that enacts these automatic cuts with the idea they could escape blame — sounds crazy I know.  As you will recall they were pressured to do something because of a lowered credit rating based on the mounting national debt and the continuance of deficit spending (spending more than is taken in via taxes). Ironically, the credit ratings are issued by the same agencies that failed to warn of the Wall Street shenanigans that led to the Great Recession that began in 2008.

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Do any of us really understand what this “fiscal cliff” thing is all about? Or has the piper finally come to get his due?

The nation, both as individuals and as a whole, has been living off of the credit card for so long that it’s as if no one really understands what it means to pay as you go.

(In the county where I live, I think it was back in the ’50s, a new court house was built and paid for cash. When they went to build a new annex some years ago, that was unthinkable).

Now the whole nation is over leveraged, as it were, and may not be able to get its hands on more borrowed money — I guess that is what it is all about.

Hard core adherents to ideology, on the right and on the left, or partisans, are using the threat of going over the fiscal cliff in a game of chicken.

(So many abhor “big government”, but if the big government quits doling out money dire consequences are predicted.)

I would say that if our leaders cannot simply conclude that we have to pay our bills and collect the necessary revenue to do so and not take on more than we can afford (and that is of course the sticking point, figuring out what we can afford — or what we have to have), then we need new leaders (I know, we just had an election) — I mean if they can’t figure that out (and they have to use their own judgment, not just what flies with the constituents) then impeachment might be in order, although I don’t think lack of judgment is a legal grounds for impeachment. But if they had any shame they would just resign.

I guess I am center left in politics. But even I, who would be more likely to support social programs, would not think that we can afford to provide services without revenue. Opting to borrow money from China and other sources so we can print more money to hand to the banks essentially free so they can in turn loan the money out for interest is leading us into fiscal catastrophe. I know, some of you who are more versed in economics and money will say I do not know what I am talking about — but be honest, that is essentially the situation.

Another fantasy is budgeting the pay back of things by forecasting more revenue in the future. The revenue does not usually materialize and meanwhile more debt is added on.

Simply taxing the rich does not solve the problem. But we do need to tax the rich and we need to take away a lot of the deductions. But we need to adjust our tax system across the board, as well.

Both President Obama and the Republican leadership need to get together and quit playing politics.

That said, I do think that the president does have the upper hand in this one. I mean elections have consequences. But you can overplay your hand too.

The way it was put in the right-wing radio show I was listening to the other day is that the Republicans are being blackmailed into accepting liberal demands for an agreement lest they be accused and take the blame for letting us all fall over the fiscal cliff. But they could hang tough and then when things get worse they can see, we told you.

Man, are we ever in need of sensible centrists.

P.s.

One woman who identified herself as a small business owner (and if I wanted to be snarky I would say probably small minded too) said that we should cut off extended unemployment benefits (and actually that is being done) so people will not just sit there and turn down jobs such as working for McDonalds). Low-pay employers prefer a captive labor market. I mean there is some truth and sense to what she said, but it is a vicious cycle. Too many low-pay jobs and the government ends up paying out money to subsidize them in the form of food stamps and in other ways. Then again, I have often thought that if most everyone worked for low pay and there were not government programs prices would come down. They did in the Great Depression — well I see, that is no solution either.