Tuesday, July 26, 2011

Where It Stands Today

Okay, here's the short version. The White House beclowned itself on the issue, transparently demanding that Congress give him a blank check until after the 2012 election, a move that even one of his own former economics advisers calls "a political argument wrapped in economic clothing". Any real work at this point will come from Congress.

Speaking of which, there's a new deal on the table now:

At the Corner, the plan goes like this:

1. $ 1 T in new debt limit ceiiing.

2. $ 1.2 T in cuts... but over ten years, and via caps, which I'm always thinking will be ignored.

3. A twelve man congressional panel formulates ways of saving another $1.6-$1.8 trillion... there are some gimmicks here to get these measures to a vote in Congress, but of course that doesn't mean they'll pass.

Plus, you need seven of 12 to get them to a vote at all.

4. Obama gets to come begging for another $1.5 trillion later.

Good plan? No. For one thing, it makes Obama come back and beg for the rest of his debt limit. I don't mind that part at all, but to Obama, that's the only thing he cares about, so it seems a nonstarter there.

There are no cuts to entitlements -- which is the Congressional Democrats' absolute-must.

There are no tax hikes -- the Republicans' must-have.

But then, it also doesn't do very much to reduce the deficit, either.

The bottom line is that even this new plan will eventually lead to tax increases. The math is really pretty simple. Our deficits are projected at $1.6 trillion per year. This plan would implement $400 billion cuts each year. That would leave us with $1.2 trillion per year in deficits.

Sounds much better, right?

No, not really.
It's still unsustainable. I'm reading that a lot of the debt rating agencies are saying that the U.S. economy will be downgraded for anything short of $4 trillion in real cuts in the near future. Anything else is too little to get us back on solid footing anytime soon. This new plan fails that test, and shows that the entirety of the leadership in Washington (both parties) isn't yet serious about tackling the debt crisis. Oh sure, they're talking a good game, but when it comes time to hammer out legislation, they all back away from real solutions.

But let's look at that commission idea to see if it could work.
Not being a liberal, I have a tendency to want to look at history to see if things have worked in the past, so let's look at the history of these debt commissions:

January 1982 – Commission on Fiscal Accountability of the Nation’s Energy Resources — Debt at $1.14 Trillion

January 1983 – National Commission on Social Security Reform – - Debt at $1.20 Trillion

January 1984 – Executive Committee of the President’s Private Sector Survey on Cost Control in the Federal Government aka – Grace Commission — Debt at $1.43 Trillion

July 1993 – National Commission on Financial Institution Reform, Recovery and Enforcement – Debt at $4.35 Trillion

September 1993 – From Red Tape to Results: Creating a Government that Works Better and Costs Less (Gore Commission) – Debt at $4.41 Trillion

October 1997 – National Bipartisan Commission on the Future of Medicare – Debt at $5.42 Trillion

February 1999 – Commission to Study Capital Budgeting – Debt at $5.62 Trillion

December 2001 – The President’s Commission to Strength Social Security – Debt at $5.94 Trillion

August 2005 – National Surface Transportation Infrastructure Financing Commission – Debt at $7.92 Trillion

November 2005 – President’s Advisory Panel on Federal Tax Reform – Debt at $8.09 Trillion

October 2008 – Congressional Oversight Panel (Emergency Economic Stabilization Act) – Debt at $10.57 Trillion

February 2009 – President’s Economic Recovery Advisory Board – Debt at $10.87 Trillion

May 2009 – Financial Crisis Inquiry Commission – Debt at $11.32 Trillion

September 2010 -The Committee for a Responsible Federal Budget (CRFB) comprehensive report titled The Future is Now: A Balanced Approach to Stabilize the Public Debt and Promote Economic Growth – Debt at $13.56 Trillion

November 2010 – Peterson-Pew Commission on Budget Reform – Getting Back in the Black – Debt at $13.86 Trillion

November 2010 – Bipartisan Policy Center (Domenici / Rivlin) – Restoring America’s Future – Debt at $13.86 Trillion

December 2010 – National Commission on Fiscal Responsibility and Reform (Fiscal Commission) – Debt at $14.02 Trillion

Call me crazy, but I'm pretty sure another commission is doomed to failure.

And yet, we see continued polling supporting leaders who will be fiscally responsible. Why are the Republicans failing to see this?

I think this opinion piece from Ben Howe is dead on:

Late last year, I posted a memo of sorts to anyone who might have listened. At the time, the issue at stake was the expiration of the Bush-era tax cuts. As I thought back on that post, I saw editors from the NY Times offering their insights on Obama offering the “truth” while Boehner “did not.” I saw the buildup in the mainstream media as the left, hiding behind their bogus claims of objectivity, used words like “reason” to describe Obama, and “attack” to describe Boehner’s reaction. It is clear that we are at a cross-roads of sorts again, and unfortunately, it is not clear that our own Republican Party is aware of what is expected of them. More than ever, the need to stand firm and reject an inch of movement is what is called for.

I considered writing a new memo espousing the same reasons as before as to why compromise is not always the answer and in fact, is being used as a tool by the progressives to slowly encroach on our lives by chipping away at our liberty, bit by bit.

In the end, I decided I did well enough before and that it bears repeating.

I have grown weary of hearing the calls for bi-partisanship. The calls for “reaching across the aisle” and “bucking your party.” And yes, I’m even tired of that sacred word that hushes the most stubborn of partisans: Compromise. Compromise in terms of leadership or lack thereof. Compromise with ulterior motives and double-speak. Compromise that hurts our country, indeed our world.

To some this is counter-intuitive and in stark contrast to the common wisdom put forth by much of the media. But the truth is, moderation & compromise have a dark and sordid past when it comes to governing nations. It gave us “The Great Society,” which ensured generations of poor on welfare and the end of the need for a father. It gave us the “New Deal” & Medicare, which are quickly bankrupting our country. It gave us the Munich Pact and the Gaza Strip. It empowered North Korea to acquire nuclear weapons and is on a steady path to do the same with Iran.

Some would say it gave us the Constitution and the Emancipation Proclamation, but that is only partially correct. In order for the founders to compromise with one another they had first to establish that they were immovable in their stance against King George. For him there would be no compromise.

In order for Lincoln to bring the States back into Union, he had to stand his ground firmly and go to war with his own countrymen rather than “negotiate” or be “bi-partisan.”

It is not compromise in and of itself that has begun to wear on me. It’s the misuse of it’s purpose. Compromise does not exist for the purpose of mindless moderation. It does not exist to create friends that would otherwise be enemies.

Compromise is a tool for coming to a common understanding, but there must be foundational common interests first. If there is not, then there is nothing to negotiate if your interests are too much in contrast with one another.

Compromise presupposes that there is something you are capable of or willing to give up, which at times needs to not be the case. It assumes that you can get what you want out of the other side without giving up so much that it destroys that which you were trying to protect.

At times, it is best not to compromise at all — to look at the opposition and determine that, not only do they not have anything to offer, but you don’t have anything you’re willing to give up.

In point of fact, you can’t have compromise if you don’t have some aspects of your position that cannot be compromised. To paraphrase Etienne Gilson, there cannot be tolerance without dogmatism. To put it another way, if I’m offered by a murderer to be killed with either a gun or a knife, I’ll choose to not be murdered.

Take note GOP leadership: This is not time to think about the political ramifications. This is not the time to balance against what others might say about you in a campaign speech or television commercial. In short, this is not the time to think about yourselves.

This is the time where you show us why we haven’t given up on you. The time where you force the Obama administration to own the crisis that they have made. Any claims to an inheritance of this problem have completely lost credibility. It’s time for the rude awakening that the left is trying to delay, to finally and at long last happen.

It is time for you to do the right thing. It is time for you to stand up for us.

Stand your ground.

Hold the line.

No compromise.

And since our elected leaders -- even Boehner -- seem completely incapable of that, it's up to us to hammer them with phone calls and emails demanding they do so. They have to be more intimidated by the American people than by the liberals in the Democrat party and the media in order to develop a spine.

Get busy...time is running out, and compromise is near.

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