When the worst case is that nothing bad happens

Charles Krauthammer is another candidate for best sequester commentary:

“The worst-case scenario for us,” a leading anti-budget-cuts lobbyist told The Post, “is the sequester hits and nothing bad really happens.”

Think about that. Worst case? That a government drowning in debt should cut back by 2.2 percent — and the country survives. That a government now borrowing 35 cents of every dollar it spends reduces that borrowing by two cents “and nothing bad really happens.” Oh, the humanity!

A normal citizen might think this a good thing. For reactionary liberalism, however, whatever sum our ever-inflating government happens to spend today (now double what Bill Clinton spent in his last year) is the Platonic ideal — the reduction of which, however minuscule, is a national calamity.

Or damn well should be. Otherwise, people might get the idea that we can shrink government and live on. [Read more...]

Best commentary on the sequester issue

From Peter Wehner:

In the Great Sequestration Debate, here’s what we know: (a) The president has paternity of an idea he now characterizes as a brutal and senseless assault on America. (b) The president and his then-chief of staff, Jack Lew, misled the public about their role in giving birth to the sequester idea. (c) House Republicans have twice passed legislation to avoid the sequester cuts with carefully targeted ones, but Senate Democrats refused to act. (d) Mr. Obama has brushed off a Republican plan to give him flexibility to allocate the $85 billion in spending cuts, which makes no sense if the president wants to replace reckless cuts with responsible ones. [Read more...]

Friday’s spending cut apocalypse

We are facing another financial deadline in Washington in three days.  Not a fiscal cliff, nor a debt ceiling crisis.  On Friday, March 1, if nothing happens, federal spending will automatically be cut by $85.4 billion.  This so-called “sequester” was part of the deal to raise the debt ceiling.   Republicans put in cuts for domestic programs, while Democrats put in cuts for the military.  Both sides assumed that these would never go through, since they go against the respective priorities of each party, but it looks like they will.  The Obama administration is decrying the cuts in apocalyptic terms, saying air traffic control will be shut down, our military will be crippled, the elderly will go hungry, and children will lose their schools.  After the jump, see what will really be affected. [Read more...]

Each party’s wrong ideas on taxes

As our lawmakers try to prevent us from falling off the “fiscal cliff” when the Bush tax cuts expire with the new year and mandatory federal reductions click in, Matt Miller argues that BOTH Republicans AND Democrats are laboring under two wrong ideas when it comes to taxes.

Republicans believe our fiscal woes can be solved by cutting taxes.  And Democrats believe our fiscal problems can be solved by raising taxes on the rich.  Miller tries to show why neither will work and how such ideological blinders will prevent effective solutions.

See Matt Miller: Dead ideas on taxes – The Washington Post.

Perhaps it isn’t that one side is right and the other wrong, or that both are partially right, but that both are wrong!  Where does that leave us?

If this is true, does anyone have any viable suggestions for putting our financial house in order?

 

Cliff diving

On New Year’s Day, the Bush-era tax cuts will expire and mandatory cuts in government spending will go into effect, a double-whammy to the economy that is being called “the fiscal cliff.”  Republicans do not want the tax increases and Democrats do not want the spending cuts.  So Congress is negotiating with the President about compromises, reforms, and trade-offs, all in an effort to avoid what nobody wants, the country going off the cliff.

But might falling off the fiscal cliff, in the long run, be the best solution, despite the horrible short-term consequences?  Under that scenario, taxes would rise dramatically (giving the government more revenue, the Democrats’ dream) but also government expenditures would be cut dramatically (resulting in a smaller government, the Republicans’ dream).  The combination of higher revenues plus lower expenditures would solve the deficit.

Isn’t this a true bi-partisan solution?  Don’t we as a nation need to take our bitter medicine before we can get better?  Other countries, such as Great Britain, have gone through austerity programs as a necessary step to fiscal health.  Could we Americans handle austerity?

(I am not necessarily advocating this, simply proposing for now a mental experiment.  Some of you suggested this in yesterday’s discussion of “Breaking Pledges,” but it’s worth discussing in its own right.)


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