During the holidays my sister-in-law got me into a heated discussion on how I could possibly have voted for such a flawed, problematic bumbler with weird religious beliefs, rather than the cool, cerebral, eloquent golden boy Obama.
What is remarkable about the recent “fiscal cliff” deal is that while during the earlier negotiations, President Obama offered relatively piddling spending cuts, the Republicans actually wound up getting even less – zero, in fact. And correspondingly, Obama actually wound up getting less in added tax revenue than Republicans had earlier offered.* These tax increases too are piddly – and, astoundingly, are offset by a new round of tax breaks for corporations which Obama – yes, Obama – insisted on.
I just read the local Metroland paper’s lefty columnist, wishing that liberals would “go off script” for a change and – wait for it – stop being apologetic about protecting entitlement spending and socking it to the rich on taxes!
Congressional Republicans now say the next needed debt ceiling vote is when they’ll really really, yes really, get serious on spending. Actually, that’s not when it will happen. It will be when pigs fly. Or when voters truly want it, which comes to the same thing.
Incidentally, remember how Republicans did extract some modest spending cuts in exchange for averting a government shut-down a couple of years back? Turns out they were snookered. Those spending cuts were a mirage. And what about that $700+ billion Obama was accused, during the campaign, of cutting from Medicare? He didn’t want to give the true rebuttal, which is that those cuts too were a fake – promised reductions in payment rates for hospitals and doctors. Congress keeps pretending to legislate such cuts, and then rescinds them when the powerful medical lobbies scream (and pony up campaign contributions — it’s really an extortion scam by legislators).
Federal debt is roughly 100% of GDP, and growing at over a trillion a year, with no let-up in sight. Medicare is the gorilla. Its cost is on track to double in a decade. In three decades, it’s set to push national debt to an impossible 250% of GDP. Tax to the max on the rich and you’ll barely nibble at the problem. No conceivable level of tax increases on everybody can close this gap.
Obamacare will not reduce health costs for one fundamental reason. Call this Robinson’s law – when government pays the bill, the price does not go down. (Just look at college tuition. The more government pays, through subsidized student loans (often defaulted), the more colleges raise tuition to milk that cow.)
Already, interest payments on the debt consume a sizeable chunk of the federal budget. But that’s with interest rates at historic lows, near zero. America can finance so cheaply today because its bonds are still seen as the world’s safest. But at some point, as our debt spirals out of control, the bond market will have second thoughts. Even interest rates returning to historically typical levels of just a few percentage points could mean a tripling or quadrupling of our interest costs – not only on new debt, but on rolling over all the old debt, all $20 trillion or whatever.
Take your pick of worst presidents – Buchanan, Andrew Johnson, Harding, even George W. Bush. But none left the nation as catastrophic a legacy as Obama’s willingness to let America slide into economic destruction.
* Note that while Democrats made a career of condemning the “Bush tax cuts for the rich,” the smallness of the revenue from repealing those cuts for the 1% shows that the bulk of the benefit actually went to the 99% — whose Bush tax cuts Congressional Democrats have now cheerfully voted to make permanent.