Sunday, August 7, 2011

The Gulf Grows Larger

  In January of 2009 when president Obama was inaugurated, there was a huge gulf already in place between conservative and liberal thought. TARP under Bush was excoriated by conservatives, and free market purists, but many republicans acquiesced.  We remember  that the stimulus that the democrats pushed was large and top loaded with spending and little real economic stimulus through tax cuts. The republicans wanted a smaller and more tax cut loaded stimulus. Of course the democrats with huge majorities and a new savior elected as president won the debate, which really wasn't a debate at all, and only got three republican votes in the senate by consistent rinos. Then Obama care was pushed and passed with no republican votes and a lot of democrat shenanigans. This was a  major transformational piece of legislation without bipartisan agreement. All this led to the eruption of conservative influence and the Tea Party movement, which culminated in a landslide victory for conservative thought in the mid terms.

Fast forward to the recent debt limit increase debate, and we again see a gulf between a democrat tax increase mindset, and republicans saying no new taxes, but still agreeing to smaller cuts then necessary to stop a downgrade of U.S. debt. We were all told the sky would fall on August 2nd if an agreement wasn't forthcoming. and just like TARP, republicans were scared into a corner like frightened mice. The Boehner plan was watered down and gave the messiah 2.4 trillion of additional debt that will Greece the skids downward through the 2012 election cycle. A balanced Budget Amendment was nixed. The stock market didn't go down until after the deal was done. Again just like TARP, republicans and all of Washington were scared because of a possible drop in the market, which accelerated after the bills were signed. The administration promised the deal would not result in a downgrade of U.S debt. Friday S & P downgraded our debt to AA+, and who's to say what will happen when the markets open on Monday. The media is trying to paint the deal as a victory for the Tea Party, perhaps positioning them for blame for the downgrade because they wouldn't agree to the grand bargain that included tax increases.

Now each side is staking out their ideological positions. Liberals are claiming that we're at the cusp of a double dip because Washington isn't spending enough and more stimulus is needed, and of course the rich aren't paying their fair share. They argue the original stimulus was insufficient. The Paul Krugmans of the world rail against deficit reduction and fiscal discipline, while proposing huge stimulus. Doing the same thing over and over while expecting a different result is still the definition of insanity. Obama seems to be doubling down on his failed policies with calls for extending unemployment benefits further and more stimulus. "Congress needs to send me a jobs bill I can sign," he shouts. What is a jobs bill he can sign? A.K.A., more spending, more debt, and more taxes. 

Meanwhile conservatives are shouting, "I told you so." They say the deal will do nothing but accelerate the decline of the U.S. economy and lead us down the path toward Greece. They argue for a new attempt at zero base budgeting. No more automatic increases of up to 8% built into each years spending. Only in Washington is a minuscule decrease in the rate of increase considered a cut. The Mack Penny plan is gaining traction, which would freeze the 2012 budget at 2011 levels and then for eight year after that one penny would be cut from each dollar spent. At that point the budget would be balanced. If the federal government can't reduce spending by 1% for eight years we're all in trouble. Even with the baby boomers retiring at exponential rates, a plan to restructure entitlements is imminently doable, if only politicians had the courage to do it. The stars may be aligning for just that scenario. The squishy middle and rino republicans are being left out of the debate, which is a good thing, because now the 2012 elections will have clear distinctions between the polar opposite ideological positions. The demagogues and fear mongers will be in full force, but maybe the debate has gotten so serious, they will be ignored. We can and must win the argument with rational and articulate debate.

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