Why the Fiscal Cliff is a lose-lose
for the Notorious G.O.P.,
and how The Debt Ceiling
won't save them
December 8th 2012 - The Progressive Jacobin,
While the pundits are scratching their heads at why Mitt Romney shopping at Costco didn't happen while he was trying to erase his Elitist Corporate Scumbag image by the American People before Election Day, we must understand that we are all being pushed toward a metaphorical cliff, of which we will fall off January 1st, 2013. Concordantly, while your first questions may be most pertinent, you may not realize they are the most irrelevant: How did we get here and who is responsible?
These are stupid questions. We as Americans tend to enjoy pointing the finger more so than actually doing something about it. So to those two questions, I refer you to Randy Marsh on the Economy and also don't forget that finger pointing gets us nowhere.
I first heard about the Fiscal Cliff in the Presidential Debates in 2012, when President Obama quickly sidestepped the question on The Sequester saying he wouldn't allow it to happen, and Mitt Romney didn't bring it up either. Since I had never heard the word Sequester before, I googled it and I learned about what is more-popularly known now as The Fiscal Cliff.
So let me answer two very important questions that need to be answered before I can explain why Republicans are screwed: What is the Fiscal Cliff and where do the two major political parties in the branches of the Federal Government of the United States stand on it?
The Fiscal Cliff is alot like Communism, but only in the sense that it looks really good on paper but it sucks at practical application in the real world, even with it's exceptions, which only prove the rule.
The Fiscal Cliff is extensive and mandatory cuts in spending, as well as an expiration of Bush-era Tax Cuts, that will go into effect should Congress and the President somehow not reduce deficit in the budget. Doesn't sound too bad, amidst the era of unprecedented Federal spending in the eyes of Republicans, and the drastic reduction in taxes since President Reagan in the eyes of Democrats. (Even the tax and spend policies of President Clinton did not return tax rates to their height under President Carter)
It means we have to curb government spending and raise new revenues, and of course, like everything in this country, we have two ways to go about doing this.
Basically:
Democrats want increases of tax rates on the top 2%, while extending middle class cuts
Republicans want entitlement reform and legitimate, tangible cuts in spending.
I know what you are saying, What does this mean?! Why can't they do both? Isn't that what is going to happen anyways? Now, your inner monologue is finally on the right track.
Well aside from the internal combustion of the Republican Party, it's going to fuck you in some way shape or form as well. I know what you are thinking, "Bush Tax Cuts? That's only rich people right?" Wrong. And it's not just Bush-Era tax cuts set to expire. It's things like cuts to the Payroll Tax, the Income Tax, and stock dividends. Things like this have a higher Multiplier - for example, the Fed. Government may lose immediate revenue by reducing the payroll tax, but this is thought to stimulate economic growth by putting more money in Joe Blow's pocket. Look the fact is, that there are alot of misconceptions on the vast majority of tax revenue generated by the United States' Government and where it comes from. Furthermore, contrary to popular Conservative rhetoric, 90% of entitlements go to the elderly, disabled, and working poor, not the infamous typical Obama-supporting moocher.
<- You got this asshole, Political Mastermind Grover Norquist.
I gotta hand it to him though. He's one of my least favorite people in politics and his not even an elected official! He's worse - he's a lobbyist. At a time when people were talking about how Bush Sr. lied to them and a Dixiecrat was leading the charge for the Left (yup, 1992), Grover Norquist came up with an idea to restore faith in the Republican Party. He would make them sign a pledge to not increase taxes under any circumstances. Now, it has gained so much momentum over the last 20 years that it is easier to list all the federal Republican lawmakers who didn't sign the pledge, than it is to name the ones that have. It seems that the noobs of the 113th Congress have more sense than their predecessors, but this is a moot point since they don't get sworn in til January 3rd, a whole 3 days into sequestration.
You also have the Tea Party - honest, hardworking Americans co-opted by the Corporate Conservative Right, because they agree on one thing: No New Taxes!
Now, some Republicans are snapping to their senses and telling Grover to go fuck himself but with the Tea Party at his back as a tangible swinger of Republican votes, they could face divine retribution in the new Congress and some people, who are not Democrats, are already calling for the Speaker's head on a stick. Are you starting to see why this is a lose-lose? Now factor in that the Obama Administration has said We are "absolutely prepared" to go over the Fiscal Cliff, that if they do, it would be Obama doing his job and Congress, specifically the House, is not doing their job and that increasing empirical evidence shows little to no relation between the Top Tax Rate and Job Growth, if you are a Republican, the ball is in your court and you are crapping yourself. Someone is going to be mad at you, the sooner you accept that the better. It's either going to be Grover and his Tea Party followers, because you raised taxes or your Republican base because you wouldn't compromise with Democrats and we plunged into a double-dip recession. Sure people will be mad at Obama, but since the dude can't run again and chances are you will, you might have to do something radical, like compromise.
But wait! What about the Debt Ceiling? Isn't that the minority party's tool for leverage?
The Debt Ceiling is pretty much a unicorn, in the sense that it only exists in people's minds. Let's get one thing straight: the Debt Ceiling does not add to the debt, we do that every second of every day, the Debt Limit is only the top rate the US Debt may reach before Congress decides to say "Fuck it, we aren't going to pay it back!" - more or less. For the largest economic power in the world to not agree to pay its debts has historically resulted in a 5% drop in the Dow Jones, as well as a AA downgrade by Standard & Poor's. So using the Debt Ceiling as leverage is a stupid idea, even Alan Greenspan says so. Although, some sources say he is, at least, partly responsible.
But wait! In Section 4 of this long-forgotten sheet of paper, insists that the validity of the public debt of the United States may never be called into question. Although, the Obama Administration has insisted this is not an option, I wouldn't trust him if he can't get what he wants. We have raised the Debt Ceiling 102 times since it's inception in 1917 - 3 times under Obama, 8 times under W. Bush, and 18 times under Reagan.
So with all that being said, how do you feel?
Yeah, me too.
Well, I guess comment, discuss, debate, whatever. I've tried to give you the facts, run with them.
I just hope we don't end up like Wile E. Coyote, so-called Super Genius....
Wooo! That was fun. -TPJ
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