Fiscal Cliff Deal

I’m just not as mad as some on the right are about this. The rich overwhelmingly voted to have their taxes go up by re-electing Obama. So be it. I also agree with Powerline blog that it will hardly make a difference in the deficit:

But what happens now that Obama has gotten his way? It will soon become apparent that the fiscal cliff deal, including precisely the tax increases that Obama has been demanding for four years, makes hardly a dent in the deficit. At best, it will reduce the deficit by five or six percent. We will continue to run up deficits of close to $1 trillion a year, and the national debt will continue to grow, as Obama has always intended. This fact can’t be hidden; it will be reported.

I’m not sure about it being reported, but the fact that this won’t close the deficit is truth. I certainly don’t want my taxes raised, but at some point people have to come to terms with the real cost of the big government they are voting for.

A lot of conservatives, and I do as well, favor a balanced budget amendment, except in the case of war or other extreme emergencies. If that were ever to become reality, paying for the government you’re voting for is pretty much built into that idea. As it is, anti-tax pledges are essentially a mechanism whereby we can continue voting for big government, buy paying for it through borrowing from future generations. Maybe it will take making people understand the cost of all this, by actually paying for it, before they will be willing to reassess whether big government is really what they want.

14 thoughts on “Fiscal Cliff Deal”

  1. But future generations SHOULD help pay for some things. Should the entire Interstate system have been paid for all at once by the taxpayers of the 1950’s?

    I think that wars should be pay as you go, except for actual invasions of our homeland.

    1. That’s not really the question. We can easily afford the highway system. The question is whether future generation should pay for a nice retirement and health care for people alive today. That’s not an investment in the future, it’s stealing from the future.

      1. The problem with Social Security is not that the benefits provided are completely out of line with the revenue stream. There is a gap but it could be fixed with relatively minor tweaks. The problem is that the politicians stole the money and spent it on other stuff. So now we not only have to close the revenue-benefit gap but replace the stolen money. Meanwhile, we have 10s of millions depending on income they were promised.

        You have a better case on Medicare, Medicaid, and Obamacare. None of these programs were anything close to actuarially sound to begin with even if the politicians hadn’t stolen the money from the Medicare trust. The elephant in the room on Medicaid is that is where most of the public money for nursing homes comes from. That problem is going to get much worse as the population ages and private funding diminishes because of Bernanke’s ZIRP. I have yet to see a reasonable solution to this. LTC insurance is a failure so obvious that even Obama recognizes it. The Brits, of course, just kill the old people but I hardly think that is a good policy option.

  2. My proposal…

    5% rich tax, that is only applied while there is debt or deficit spending (or war). Perhaps 10% (5% while there is national debt, and 5% for deficit).

    So basically, the rich would want a more balanced budget so that they are taxed less.

    And get rid of all the loop holes.

  3. Errrr, you’re not concerned that the Republicans abandoned about their last remaining principle in voting for the first bipartisan tax hike since 1990 when Bush broke his “read my lips” pledge?

    Team Obama thinks it’s a very big thing, “1 of the most consequential policy achievements of the last couple decades.“.

    Let’s just hope history doesn’t repeat itself and the Republicans get rescued by gun grabber overreaching … although that would take them losing power in the House first.

    1. Ah, and what about the split in the House Republican leadership, with Boehner in an unusual move voting for it (Speakers typically only vote to break ties), but his #2 Majority Leader Eric Cantor and #3 Majority Whip Kevin McCarthy voting against it … after they pushed their caucus to vote for it.

      This is not good unless Boehner is going to step down today or tomorrow (formal votes on leadership are tomorrow).

  4. The rich overwhelmingly voted to have their taxes go up by re-electing Obama.

    That’s an “it depends”; to quote the Instapundit in a general discussion on the Democratic reluctance to raise taxes on their supporters:

    That’s the problem with that whole war on the rich. Obama’s enemies are the small-business Kulaks, who vote Republican, but he can’t go after them without hurting the nobles who support Democrats financially.

    That’s what “You didn’t build that” was all about, and the tax increase threshold on “the rich” around $400K (with quite a marriage penalty) is actually set pretty well to sweep up the Kulaks without touching a lot of the ruling class’s well paid minions. The nobles? Well, as you said, they voted for this.

    Although the expiration of the 2% FICA tax decrease will hit everyone (there’s a $108K cap on income subject to it); that’s a 120 billion year-to-year increase. I’m hearing is’s a $2,000 average increase, but you can of course do the math, e.g. 2% of $50,000 is $1,000. Regressive, of course.

    The only saving grace to this increase is that it’ll actually go to pay the intended cost; from the 1983 increase until the Great Recession put Social Security into deficit, the excess collected has been spent and replaced with unmarketable IOU’s in Al Gore’s famous “lock box”.

  5. The problem is not all of us “rich” folks voted for captain worthless. I’m an engineer and my wife is a family practice physician, which puts us into that “rich” category, but I can emphatically say we are not in fact “rich” especially not with a gigantic pile of med school loans hanging over our heads…

    1. I can sympathize. I’m just not sure how you get everyone else to realize that this shit costs money. If we keep borrowing it (and we can’t, at this rate), it never seems to ever cost them anything.

      1. Fact is I don’t think you can. That’s part of the reason I’ve thought we’re a nation in decline for quite a while.

        We’re on the same road with all the Eurozone countries, with a population that believes they can have whatever they want while someone else pays for it. The Eurozone is just further down that road because they started on they journey sooner.

        The people of the US are in for a rude awakening when the laws of economics hit them like a ton bricks and the money just runs out because “Soak the rich” won’t cover the bills. It’s going to be quite a shock when the middle class has to pony up their share of the gov’t BS or the checks just stop coming…

    2. Well, you’re almost certainly a Kulack; in theory they care about your wife, but grossly incompetent by making the role of primary care physician so onerous and unremunerative we’ve got an official shortage of 9,000? right now and it’s thought it’ll just go up and up. Even people who enter their residencies with that goal have a strong tendency to decide to specialize by the time they’re finished, after they’ve seen first hand enough of the sausage production at that level.

      1. In 5 years time, when people are wondering why grandma can’t find a doctor, point them squarely at Obamacare.

        No more PCPs, yet we’re dumping millions more people into the system at the same time we’re cutting medicare/medicaid reimbursement rates.

        Guess what’s going to happen, your friendly neighborhood PCP, in the interest being able to eat, is going to dump the old folks and the poor folks in the interest of having time for the people with insurance that pays.

        At the same time, the burden on PCPs is increasing because of all the mandatory preventive care stuff that’s in Obamacare. Estimates are, that without accounting for the people added to the system, the current average burden on a PCP with the mandatory care levels, will amount to 8 hours a day.

        Every PCP in the country, working their entire day, just on the mandatory care for the current patients. When is there time and manpower to deal with your actual problems in that, before you add more people to the system.

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