July 10, 2011

No BIG budget deal for Obama

Poor President Obama, he wanted the big budget deal that included tax hikes but he didn't get it.  To his credit, Boehner refused and fell back to the smaller deal that had no tax hikes associated with it.  Why is that good? Three reasons.

(1) There's no tax hikes.  Tax hikes are never fun, and mostly never a good thing, but to raise taxes in a recession is beyond foolish.  Even President Obama seemed to think so a few months ago.

[Warning you may lose your balance as a result of the spin. Please remain seated while watching].

(2) In 1982 when President Reagan agreed to a combination of tax hikes and spending cuts, one part materialized and the other part didn't.  Can you guess which? In the Tax Equity and Fiscal Responsibility Act of 1982, Ronald Reagan agreed to the tax hikes on the promise from Congress of a $3 reduction in spending for every $1 increase in taxes.  The taxes of course kicked in very quickly, while the cuts never materialized.

(3) The Democrats' "balanced approach" isn't really balanced, all things considered.  The Washington Times catches the White House sense of disappointment;
White House communications director Dan Pfeiffer issued a statement later Saturday night repeating the president’s call for a “balanced approach” on deficit reduction and urging congressional leaders to keep negotiating with the administration on the largest possible deal.
When the last two years have seen over $3 trillion in deficit spending, more revenue is not the problem - DEFICIT SPENDING is the problem.  The word spending is part of deficit spending, how much more insight do you need?  If a person is overspending and overeating at McDonald's the solution is not to lend him more money to spend, the solution is a diet.

There's another Democrat spin trick at work here too. The Democrats are trying to portray a BIG deal failure as being the fault of Republicans.  But while they ignore the root cause of the problem, they are also going to try to portray the GOP as not wanting to get serious and do big cuts as the President has suggested.  The premise is ludicrous but the Democrats are experts at spin and with a compliant press it could take hold.

Reader questions

(1)  Is a $2 trillion or even a $4 trillion spending cut enough at this point?  A $2 trillion deal might be a good deal for now (if the cuts actually materialize), but it sets up the need for another, larger battle again next year.

(2) Is a short term deal a win or a loss for the GOP or the Democrats?

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