Nancy Pelosi has recently reared her ugly head once again, this time in an interview with ABC’s Martha Raddatz here.
In the interview, Pelosi says that the upcoming ‘fiscal cliff’ must and will be dealt with, but any deal made will include raising taxes on “the rich”. That statement is getting a lot of attention in media circles, but to me, the important quote of hers is “Just to close loopholes is far too little money.”
For Liberals, no amount of money is ever enough. I find it tragically funny that they are always so eager to attack ‘greed’ when “the rich” make use of their money, but for some reason there is no element of ‘greed’ in taxation, or the motives of politicians. That deserves an article all its own though, for today I am simply talking crude politics.
The government is facing a ‘fiscal cliff’. I claim to be no expert, and in-depth analyses are readily findable on Google, but in a nutshell: the Bush tax cuts are set to expire and deep, severe cuts are set to be implemented, that is, unless Congress can negotiate a deal for the government to trim its budget deficit, either through increased taxation or budget cuts, or a little of both.
This is a sequel to the “debt ceiling” battles royale fought in the summer of 2011. Back then, Congress was just as immature as it is today, and it couldn’t really make itself pay the bills, which is essentially what this entire ‘fiscal cliff’ business is all about. So, instead of coming up with a real solution, Congress put a temporary band-aid on our government’s financial woes, saying that they would come up with a better fix after the election. And, just to make sure that they did in fact do this, they locked themselves into a “doomsday scenario” where tax raises and “drastic cuts” (to the military in particular but to entitlement programs as well) would automatically go into place unless a bargain is struck.
One must always be skeptical of people in government when they use the word “cut” in the context of a budget. One must be especially alert when the words “severe” or “draconian” are also used. The reason for this is simple enough: politicians are liars. There have been countless instances of the so-called “severe cuts” being little more than cuts in the projected level of spending. In practical terms, this means that the govt. wanted to spend 10 billion dollars on something next year, but only spends 8 billion when the time comes. Occasionally real cuts do occur, but these are the exceptions, not the rule.
The key phrase to be on the lookout for to determine if the cuts are real or not is the phrase “over ten years”. When that little phrase crops up (usually tacked on to the end and in small print), it almost always guarantees the cuts will not happen. Such it is with the “fiscal cliff”: the 1.2 trillion dollars in cuts will be “over 10 years”. The reason this is a sham, and almost always is, is because there is nothing to stop a future Congress from saying “You know those cuts we said we were going to make this year? Yeah, not going to happen.” It happened under Reagan and Bush I; Congress conceded some spending cuts in exchange for a few more taxes, the taxes came immediately, and the cuts came…never. And that is the one constant about budget bargaining: the Democrats don’t want any cuts of any kind ever, other than to the military, but they want tax increases NOW!
Ever since then, the Republicans have taken a “Fool me once…” approach to these sort of talks. They might, in theory, be willing to agree to limited tax increases, but they say (rightly so) that there is plenty of waste and unnecessary spending in the budget that can be cut to help slim our deficit. In the Media, the Republicans are lambasted for being intractable because of their unwillingness to talk about ‘revenue’ (as taxes are called by Big Government proponents). While Republicans are being obstinate in regards to taxes, Democrats are being equally obstinate in their opposition to cuts to anything other than military spending (even when the cuts would save such beloved programs as Medicare and Social Security).
So here is my take on all of this: there is plenty of stuff that can and should be cut from the Pentagon’s budget, cuts which Republicans should be in favor of. Unfortunately they aren’t. Likewise: Social Security and Medicare should both be trimmed, but unfortunately, the Democrats will have none of it. And, for what it’s worth, raising taxes on “the rich” (or, for that matter, raising taxes on everybody) will do nothing to solve our budgetary woes. That being said: the Republicans should do nothing to stop the Democrats.
This is where my inherent pessimism creeps in. I think that for the Republicans to fight to prevent tax increases will merely further damage their brand. Obama has the moral high ground, at least in the public’s eye (you know, the whole “rich need to pay their fair share” bit). So I say that Republicans should let the Democrats run hog wild and fix the budget however they want. Why? Because I highly doubt that the Democrats, even given carte blanche in fixing the budget, could fix it. There is virtually no way to eliminate the budget deficit through taxes, as shown here.
So the Republicans step aside and they let the Democrats’ ideas fail, as they will. When the Democrats’ ideas do fail, there is no way they could get away with blaming the Republicans (or, hopefully, anything else). Then the Republicans can step back into the picture and say “We told you so” and they can then fix the budget their way. When that happens, we (meaning the ‘real’ conservatives and libertarians) can only hope that the Republicans’ way is also our way.
Former Speaker of the House Newt Gingrich said on ABC’s “This Week” (here, at 15:45) that to go over cliff would be “mildly chaotic”. I think that, in terms of governance, the consequences of “going over the cliff” would be bad, but nothing that would impact most American’s lives. I’m not sure if I agree completely with Newt, but I do share the sentiment that the cliff is not the end of the world.
In the same segment on ABC, that Holy Oracle of Conservatism, George Will, said that to go over the cliff would achieve the long-term hard-left goals of the Democratic Party: massive increases in taxes and drastic cuts to the military. I do agree with George on this one because, as I have already said, to let the automatic triggers go off would almost certainly be a Democratic victory.
Going over the cliff would mean that taxes would go up while the cuts will almost certainly not take place and, even if they do, will likely only affect the military. Let me reiterate that we do need cuts to the military, but to cut only the military would be unwise. As the Democrats themselves say about this budget mess: we need a balanced approach.