Surely Lucy won’t pull the football away this time!
Republicans led by naïve supply-siders are preparing, for the third time in my life, to sell their souls on spending cuts in exchange for tax-rate reductions that are small, ineffective, and sure to be temporary. Ronald Reagan got his tax cuts, but he went to his grave waiting for those spending cuts. George W. Bush got his tax cuts, and ended his presidency with spending soaring and his entitlement-reform program in the garbage. And now certain Republicans are starting to slobber over the Gang of Six plan, because it reduces the top income-tax rate to 29 percent. Overall, the plan is supposed to be a tax increase — a $1.2 trillion one — but it sweetens the deal with rate cuts, and rate cuts turn Republicans into useless piles of goo.
The rate cuts, we are told, are “pro-growth.” Growth is the great magical unicorn that will deliver us from the burden of making hard decisions, we are promised.
But the important drivers of our deficit are entitlements, mainly centered on health care, the cost of which is growing at about three to four times the rate of GDP growth. We aren’t going to grow our way out of that problem — not at 2 percent, not at 5 percent. We’ll simply keep spending, pile up more debt, and have a debate like this again in a couple of years, if we’re lucky — or in a couple of weeks if we aren’t.
Nothing short of comprehensive reform of Medicare, Medicaid, and Social Security is going to stabilize our public finances. The Gang of Six deal contains only very vague language about “efficiency” in health-care spending, and it actually makes Social Security reform more difficult by introducing procedural barriers. It’s a terrible deal, and Republicans would be fools to take it.
As usual, the establishment Republicans are assuming that the threat of a SECOND OBAMA TERM will make 2012 THE MOSTEST IMPORTANTEST ELECTION EVAH and cause the rebellious Tea Party element to dutifully fall in line and vote them back into office. And they may well be right, again.
On the other hand, increasing numbers of Americans appear to be increasingly aware of the charade and of the irrelevance of the bi-factional game in comparison with the economic issues. If House Republicans are willing to raise the debt ceiling, then what difference does it make if the Magic Negro, Captain Underoos, or Al’s Pal happen to be seated in the Oval Office as the economy begins to deleverage?