Anyone who has glanced at the news recently knows that the battle over the federal budget has continued after all the fiscal cliff hype ended with an absurdly small and insignificant agreement to postpone most difficult decisions. As the LA Times noted in a recent article, President Obama used the last press conference of his first term to reiterate the claim that he would not negotiate with the House Republicans, many of whom have continued to assert that the debt ceiling is the best opportunity conservatives have to extract spending cuts from the White House.
There are obviously many factors contributing to tension between the GOP and the White House, but one likely reason the President has been vocally opposed to negotiating during this debt ceiling debacle is the backlash he faced from even his most moderate supporters when he was accused of being weak and playing into the hands of the reckless GOP brinkmanship.
Regardless of how you personally view the finances of the federal government, there are undeniably two sides to this problem. There is the purely fiscal policy side of the issue, and although this is the much more important side to the issue, both parties have generally been laying out their arguments in talking point format since the 2012 election began in 2011. Then there is also the political side, which can obviously be more of an obstacle of progress rather than a catalyst for progress, but that does not make it any less important.
From a purely fiscal view of this current standoff, it would seem as though the GOP holds many, if not all, of the cards. President Obama, being a liberal, believes the government can and should play a positive and active role in the economy, and to a lesser extent society, and given that the GOP disagrees and feels that "the government that governs best, is the one that governs least," it would only be logical to conclude that the GOP ultimately has the upper hand given their ability to progress their ideology by refusing to act.
The problem for the GOP, and the reason the President and his allies seem to have room to operate, is completely due to the politics of today. The GOP knows that reverting to the tactics of 2011 after losing an election in 2012 might cause further disillusionment for the more moderate supporters who seemed to flee the party as the Tea Party influence continued to spread. There is also the fear that the aesthetics of risking the credit of the federal government to get what they want could only cause further setbacks in the attempt to reclaim the legislature in the 2014 midterm elections.
The problem for the President and Democrats in the legislature is simply that although the potential exists to score an early political victory, this is very much not the time to be focused on such things. The Democrats could use this whole debacle to once again paint the GOP as extremely ideological, and out of touch with the large numbers of unemployed and the perpetually struggling middle class, and it might even distract attention from the inability of the Democratic party to come up with many serious ways to cut the three things that equal over 60 percent of the federal budget: Medicare, Social Security, and the military.
Combining liberal cost-cutting measures like means testing Medicare and cutting defense spending with conservative proposals like reducing the payout on the beneficiary side of entitlement programs, would be the best way to win a political victory, but shouting and proclaiming how bad the GOP proposals will be, unfortunately, seems to be just as effective, and it doesn't require making any tough decisions.
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Comments: 17
Government spending is far more stimulative than tax cuts ever were.
Obama will not be able to recover the economy that he inherited from himself.
We have had this argument before, recessions, can be a normal business cycle that comes and goes like the sun across the sky. If you do nothing it goes away faster than if you try to stimulate the economy out of the recession. Cutting government spending puts more money back into the economy by allowing those who earn the money in the first place to invest and spend it. If government tries to stimulate the economy, it must first take the money out of the economy and then it picks where to spend it. Good for politicians but not so good for the tax payers. The tax payers are better able to make economic decisions for themselves.
"Government spending is far more stimulative than tax cuts ever were." if that were true, we could really fix the problem by taxing everyone 100% of their income and the government would supply us with everything. It has never worked. This economy was built on free enterprise or the private sector. That is where wealth is created by taking iron, lead, plastic and paying pennies per pound and turning it into cars worth $30K. Other than roads the government does not produce a product that has that kind of value add. Is your plan to pave this country from sea to shining sea, to fix the economy?
"Can a people tax themselves into prosperity? Can a man stand in a bucket and lift himself up by the handle? " Sir Winston Churchill
If you do nothing it goes away faster than if you try to stimulate the economy out of the recession. Cutting government spending puts more money back into the economy by allowing those who earn the money in the first place to invest and spend it. If government tries to stimulate the economy, it must first take the money out of the economy and then it picks where to spend it.
This is based on the erroneous assumption that money the government taxes off of the individual or business is "taken out of the economy", which of course is pure bollocks.
All the economy is is a numerical valuation of all human activity, money being the numerical indicator we use to measure that activity. Government activity is included in that. So when the government taxes you, that is part of the economy. When the government receives your tax contributions, that too is part of the economy. When the government spends that money by hiring government workers of thousands of different kinds or building up infrastructure or investing in one program or another, that too is part of the economy. When the government gives some of that money to seniors, veterans, the invalid or even to the indolent that, too, is part of the economy. And when all of those people spend the money they receive from the government, this is also part of the economy.
Tax cuts produce very little stimulus compared to infrastructure construction or employment insurance benefits. Something like 24 cents on the dollar compared to well over $1 per dollar for the spending side.
And you can do it without consigining a huge segment of your population to penury.
'Read my lips, I'm not fighting this. There is no negotiation, the U.S. debt will be paid, I will not be hamstrung by use of a government shut down, or if one occurs the blame for that seats with the Republican Party, period. The choice is simple been there don't that already"
President Obama wins again for the American people.