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Progressive Politics in Minnesota, the Nation, and the World

The Next Line in the Sand

Category: GOP Politics
Posted: 08/01/11 03:50

by Dave Mindeman

There is a deal. Let the headaches begin.

You have to hand it to the House Republicans. They were determined to hold the debt ceiling hostage until they could move their agenda forward. A willingness to bring down the world economy in order to win a political victory is a difficult thing to fathom, but it happened.

And, although, economic collapse may be diverted...for now, the consequences of what has been agreed to will soon be impacting all of us.

Republicans tell us of the dangers of mounting debt....and there is no doubt that it is a serious problem. But there are really only two ways to fix that -- spending cuts or revenue increases. The basic truth is that in a fragile economy, spending cuts and tax increases will both take money out of the economy. Money that is needed to fuel growth. Republicans tell us that tax increases are much worse than cuts, but the reality is that the opposite is true.

A large number of economists have reasoned that selective tax increases can be less burdensome than massive cutting. A combination of the two would be the most logical method of meeting budgetary balance. But that was rejected from the outset in the current impasse.

The Republicans drew that proverbial line in the sand and they prevailed this time. The cuts will happen and the states will need to prepare for the next round of massive budget deficits.

For progressives, this has been a big disappointment. But it will have to be dealt with. The cuts are there but it is now time for Democrats and Progressives to draw their own line in the sand. Our line has a deadline as well. It is December 31st, 2012. And the encouraging thing about this deadline is that all we have to do is to get Congress to do what it does best -- nothing.

December 31st, 2012 will end the Bush tax cuts forever. The main reason for our budgetary woes in the first place will be eliminated.

And the true irony is this.....if the Bush tax cuts are allowed to expire, our budget deficits will soon be gone as well. The major spending cuts, in this deal, might have happened anyway. Maybe not on the scale that is proposed but in some form anyway. But if our conservatvie friends are really, really concerned about deficits, then the end of the Bush tax cut era should be a high priority for them as well.

The Tea Party crowd got their way this time using dangerous leverage. But the next round is a progressive line in the sand and this time, Democrats need to all be on the same stalwart page.

comments (6) permalink
08/01/11 19:02
Ford, I'm not sure what government you are referring to but majority elections don't matter anymore. 100 House members held the government hostage in the debt crisis. 41 Senators can block anything in the Senate. What majority rule are you talking about?
08/01/11 18:59
Simply amazing logic. Circular, but amazing.

How quickly this turns into a world-wide disaster. What a joke. This whole debate was a joke. And the joke was on every single voter who supported these 5th graders, and the media that spins the hyperbole.

Elections matter! Get over it! This was not a meteor speeding its way to earth to destroy life as we know it. It was rhetoric. Just words folks. The real disaster has not yet been discussed. The trend is continuing and it goes unnoticed.

The feds are shifting responsibility to the states. When we succeed at making regional issues federal, we get to fight a federal fight. I don't care if you are talking about 35W bridge repairs, asian carp flowing into the great lakes, maintaining homes at or below sea level in Louisiana, or mitigating floods on the North Dakota prairie. These are regional issues. The notion of getting others to pay for our problems is coming home to roost.

Fixing blame on Republican or Democrat is ridiculous. Why? Because they are the right and left wings of the same bird of prey. Which 'wing' is of little matter.

I'm not sure what Dave's reference to "the tea party crowd" ... "using dangerous leverage" has to do with anything. I'm not aware of tea party being a ballot choice in any election.

Elections matter! Get over it! Run your candidate and win so they get to run things. That's representative government. The one in charge gets to run the place. Get over it. Good government knows no party. Good policy knows no party. Good ideas are everywhere. Identify, promote, and push an agenda based on consensus instead of hubris.
08/01/11 16:36
"massive cuts?" Do you mean to say that $1 trillion over 10 years out of $40 trillion (2.5%) is massive?

What a joke.
08/01/11 10:39
My head hurts - - from beating it against the wall after looking and listening to Republican tax talking points consistently regurgitated without a thought to common sense.

First, from the comment section, just because a president's talking points say it is so, does not mean it is so. He refused to fight and laid down for Republicans again, because he is not really a Democrat in the idealistic sense. He won't begin to fight and neither will Congressional or the state Democrats until it is clear that the base won't take it anymore. As the Glenn Greenwald column stated today, the way that Democrats get the base behind them is to scare them with Pictures of Michelle Bachmann. In reality you have to be willing to lose a little to gain a lot. If you don't want anymore of this crap start voting for a third party until they start fighting for the reasons they were elected, the basic ideals of the Democratic Party.

Now for Dave's comment:
"The basic truth is that in a fragile economy, spending cuts and tax increases will both take money out of the economy"

Pure Poppycock! Geez guys come on! The fact is that it all depends on who is getting taxed and what type of tax.

The ?obnoxious? tax increase Star Tribune article had billionaires like Vance Opperman, an alleged Democrat, saying that tax increases on the rich would be ?obnoxious? for a variety of reasons including the fact that it single out a group of people to tax, and that it would hurt job growth, kill expansion, cripple efforts to attract the top talent, cut profit sharing, stifle philanthropy and ultimately brand Minnesota as a difficult state in which to do business. They suggested taxing clothing, consumer services and other items which they deceptively explain, that ?hits the people with more income.?

Holy smoke and mirrors! And you didn?t hear a peep out of any Democrats challenging such poo poo because they never want engage their brains and fight back.

The reality is that they have it completely backwards. Cut through their rhetoric and think logically. Billionaire Vance Opperman got to be a Billionaire, not just from the sweat of his brow, but because he manipulated governments at all levels to his tax and monopolistic advantage. He was feeding at the government trough constantly looking for tax deals to increase his bottom line. He was shelling out big money to ensure that his business would hold close to a monopoly in government contracts and procuring other benefits by his large lobbying efforts including cozying up to judges that would rule in his business? favor providing the opportunity for holding even more power. The country didn?t profit from that, big companies like that use their financial power to curtail competition by either running them out, or buying them which in turn leads to layoffs and more jobs overseas.

When you engage your brain on the poo poo that such an article puts out there you see that it makes no logical sense. Increase in taxes would stifle philanthropy, hurt job growth and kill expansion? I think not. There is a difference between the types of taxes and their consequences depending on the income level. An increase in ?income taxes? on the wealthy would actually work the opposite by increasing philanthropy. Why do billionaires give as much as they give? To reduce their tax burden. On the other hand, if a person borders on just barely having enough income to meet their needs, ?income tax? increases would work in the opposite way, by stifling philanthropy because at a lower income they need to put their money toward their own basic needs first before they would attempt to give, no matter what the beneficial tax reductions may be in store.

The same is true for job creation. If tax policy were to be set up to raise the ?income taxes? on the wealthy and large corporations, with the removal of the various foreign investment loopholes, it would cause an increase in jobs here in the U.S. for tax avoidance reasons. Tax policy if done right, can maximize economic growth here in the U.S. and also prevent what we see in large corporations that seek to destroy or completely swallow up their competition because we give them so much advantage over small businesses. Basically our current tax policy rewards the job terminators and punishes the job creators by not making the distinction between how each size and type of business operates.

Democrats overall are acting like suckers for never fighting to make the distinctions in tax policy and the consequences of various taxes. It is never black and white. There is no monolithic approach to tax policy that has uniform consequences on all income levels with all types of taxes. Various taxes on various groups can be advantageous or destructive. And it is the failure to make such distinctions in tax policy that will continue to drive this country to lower our standards and our economic growth levels. If Democrats would just simply start fighting back with the facts and quit regurgitating all the Republican tax talking points and begin to challenge the media to actually start acting like journalists by reporting the facts instead of stenographers reporting the ?he said she said? garbage, Republicans would lose their artificial credibility and lose elections.

08/01/11 06:22

FYI : The Obama Administration has issued a Fact Sheet on the proposed resolution ... including these key comments.

The Enforcement Mechanism Complements the Forcing Event Already In Law ? the Expiration of the Bush Tax Cuts ? To Create Pressure for a Balanced Deal: The Bush tax cuts expire as of 1/1/2013, the same date that the spending sequester would go into effect. These two events together will force balanced deficit reduction. Absent a balanced deal, it would enable the President to use his veto pen to ensure nearly $1 trillion in additional deficit reduction by not extending the high-income tax cuts.

In Securing this Bipartisan Deal, the President Rejected Proposals that Would Have Placed the Sole Burden of Deficit Reduction on Low-Income or Middle-Class Families: The President stood firmly against proposals that would have placed the sole burden of deficit reduction on lower-income and middle-class families. This includes not only proposals in the House Republican Budget that would have undermined the core commitments of Medicare to our seniors and forced tens of millions of low-income Americans to go without health insurance, but also enforcement mechanisms that would have forced automatic cuts to low-income programs. The enforcement mechanism in the deal exempts Social Security, Medicaid, Medicare benefits, unemployment insurance, programs for low-income families, and civilian and military retirement.
08/01/11 06:08

Key Observation : <i>The cuts will happen and the states will need to prepare for the next round of massive budget deficits.</i>

What you will see happening in the future is what happened last week during the House debate over appropriations.

Are you familiar with the Great Lakes Restoration fund ? (think asian carp)
Obama got it raised to $450 million ... then the House Republicans won in 2010 ... the new funding was cut to $250 ... naturally, this caused heartburn for Congressmen that have districts around the Great Lakes ... an Ohio Republican Congressman offered an amendment to increase funding by $50 million and taking it from Climate Change funding ... in essences the pie is the same size, but the GLR slice is larger while the CC slice is smaller ... Betty McCollum lead the charge against the amendment ... while she supported the GLR funding, she did not want to see Climate Change funding reduced and she had documented studies to support the need for increased funding for both budget items ... in the end the Amendment was approved - narrowly -
In the end, it came down to "pick you poison" ... it came down to which states do you support ... it came down to whether your area had fishermen and boaters. It came down to whether you believed that climate change can be affected by Congressional funding.
AND, since some states are more impacted than others, the affect is different ... so if your Ohio and believe that the Lake Erie has an impact on your business climate, you may need the funding ... oh, and don't forget the Republicans are changing the Clean Water rules to give the states preemptive power over the EPA ... in the end, it's bad.

But that's the future ... except the pie will be so small that major programs are affected.

IMO, a lot of this comes down to WHO is the committee of 12 that will decide this and which "sacred cows" will not be touched ... Ag Subsidies ... ethanol ... manufacturing credits ... passive income ... etc.
Even Paul Ryan would not touch some of these.


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