Member of the reality-based community of progressive (not anonymous) Massachusetts blogs
A self-identified strong political centrist friend on facebook recently expressed his disgust at Obama’s “compromise” on the tax cut extensions for the rich. I commented that if Obama has lost him, he really has lost the squishy middle. Polls show that the vast majority of Americans didn’t want a tax cut extension for the wealthy. And in the context of all the (somewhat misplaced) concern over deficits, this so-called compromise from Obama is even weirder - after all, neither the tax cuts, nor the unemployment benefit extension that we “got” from Republinans, are “paid for.” Which makes both the Republicans, who “ran” on the deficit, and Obama, with his Catfood (er, “Deficit”) Commission, incredibly hypocritical.
Of course, Obama didn’t lose, and the Republicans didn’t win, on the election being about deficits. It was about an economy that people felt hadn’t gotten enough attention by our leaders of either party. Many stayed home, and the result was that the fired up Republicans took control of the House. But you can’t convince a Republican about that by giving in to him.
But it gets worse. Obama called the Republicans “hostage takers” - and he’s right. They held a gun to Americans suffering with long term unemployment, and to tax cuts for the middle class, and demanded a ransom for the rich, despite the 60%+ of Americans who don’t want that. Obama wants us to believe that this was about preventing harm to the hostages.
He might be right, but only for the short term. What do you get when you negotiate with hostage takers? Emboldened hostage takers. They now know they can threaten harm to get what they want with little or no consequences. And the next threat of harm is right around the corner, and is very, very dire - Chris Bowers at dkos explains:
The problem is, this deal does not free the hostages, and escort them to a safe place. This is because, at a minimum, the deal does not raise the debt ceiling.
According to current projections, Congress will have to vote on raising the debt ceiling in late March, or else the whole country goes into default. At that time, Republicans could–and likely will–take the entire country hostage. After their successful hostage taking on the tax cuts, in exchange for raising the debt ceiling preventing default, they could demand spending cuts that will far exceed any of the stimulus in this deal, or exceed any collateral damage caused by not doing this deal.
Keep in mind that many Republican leaders threatened this very thing already. It’s not a matter of maybe, it’s a matter of when and how much.
This time it won’t be your $400-to-700-on-average tax cut extension on the line, or the $2M long term unemployed, but the “Full Faith and Credit of the United States” held hostage. That threat, if carried out (government shutdown, defaulting on loans, the works) could cause another severe dip back down to recession. So, what safety did we gain for the American public with this deal? After all, we just proved to Republicans that holding the American economy and people hostage gets them pretty much everything they want.
Republicans leaders don’t really believe their own hype that tax cuts for the wealthy (or preventing the lapse of such) really helps job growth. The Congressional Budget Office, and many other prestigious institutions, have said over and over again that this “trickle down” theory doesn’t really work - tax cuts for the rich are not stimulative. It is marginally more stimulative to cut taxes for the middle class and below, as they are out there spending their money on goods and services, and so will spend marginally more if given tax cuts. It is more stimulative still is to ensure that the unemployed are buoyed up by benefits, and the best stimulus is direct government spending. Those facts are not in dispute - unless you’re a Republican leader (or their adherents) trying to sell a despicable tax and spending cut policy that will continue to erode the middle class.
In fact, you can easily make the argument that a double dip recession will only benefit Republicans politically, as people will continue the blame the party that is mostly in power, even if in name only. You might even be able to make the argument that they could be cynically aiming to bring us back to recession in order to peddle their snake oil solutions in 2012, and possibly succeed. Certainly, with Democratic leaders reluctant to use their bully pulpit to fight for what will help the middle class and small businesses, there really isn’t any competing storyline out there to gainsay them.
The fact is, not holding a line now will have consequences going forward. Not just political consequences - those are pretty bad alone. But also policy consequences on the “hostages” that Obama thinks he just saved. Enjoy the compromise you have now, because it’s going to get even worse later.
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