Thursday, August 23, 2012

They Have A Plan!

Several months ago the debt commission failed to reach a compromise on paying down our debt and reducing our deficit spending.  Their inability to find a bi-partisan solution  meant that a previously agreed upon series of drastic cuts to domestic programs along with huge tax increases brought about by the expiration of the Bush tax cuts would automatically kick in at the end of the year.  At that time we wrote that if congress failed to find a fiscally responsible compromise before 12/31/12 the economy would spiral into a deep recession; even worse than the one we experienced in 2007-2009.  The Congressional Budget Office and several other economic think tanks sounded the same alarm.
As the months wore on our elected leaders in congress did nothing to heed these warnings.  Republicans spent their time bringing one anti-abortion bill after another to the floor of the House and running a series of presidential primaries featuring a slate of some of the most bizarre and unqualified candidates ever seen in an election.  Democrats spent their days blaming Republicans for all the gridlock in Washington while refusing to consider reforming the primary cause of our deficits…entitlements.  The unwillingness of either party to commit to a serious conversation about the fast approaching economic cliff has led us to where we are today…which is stuck in the same disastrous place we were months ago.
The Congressional Budget Organization just released another reminder that time really is running out and the cost for doing nothing is severe.  The CBO said the $500 billion in sequestration cuts scheduled to occur at year end would reduce the GDP, increase unemployment to 9.1%, rob 2 million people of their jobs and send the economy into a long deep recession.
You would think that even this “do nothing” congress would respond to the urgency of this warning. 
Not so much! 
In fact both parties seem willing to let the fiscal cliff diving occur so that they can make political hay in the aftermath.  Sounds crazy but it is true.
Behind the scenes Democrats, still smarting from having their agenda held hostage by Republicans for the past two years, are saying that they are willing discuss entitlement reform in exchange for increases in revenues.  But they are willing to let the country go off the cliff first because it is the only way to get Republicans to take them seriously at the bargaining table.  Republicans are said to be willing to consider increases in the tax rates in exchange for entitlement reform.  But they want to let Armageddon occur first because if they vote on any tax issues now they would essentially be voting to RAISE taxes.  But once the Bush tax cuts are allowed to expire any votes taken would be to REDUCE taxes.
That’s how these folks think! 
“Yes, we understand that the country’s fiscal solvency is important but we need to address it in a manner that makes us look good.”
So if you are wondering why these clowns are focused on “legitimate rape” when the economy is about to crash and burn… No worries!  They have a plan.

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