Monday, November 21, 2011

So Much for the Supers

Well, what did you expect? Of course they deadlocked, and as Paul Krugman pointed out in his column in Friday's Times, it's the best outcome we could have had. Anything short of a deadlock would have been a Democratic cave-in, since the Republicans are totally committed to protecting their plutocratic masters from any slight discomfort or inconvenience.

As we all know, in our current government, it's the President's job to cave. Okay, maybe that was a bit cruel. Honestly, I think Obama really believes a lot of that neoliberal bullshit the "New Democrats" have been spouting for twenty years now. Coming out of the Ivies and then teaching at the University of Chicago, he would have been marinated in it for most of his intellectual life.

I think those "automatic cuts" that are supposed to be triggered in 2013 have about as much chance for survival as a Democratic candidate in Utah, even though $1.2 trillion over ten years is not a hell of a lot of money. Congress will have over a year to backtrack, and find ways to rescue its unquestioned overlords, the defense contractors.

If Obama genuinely wants to make a difference with regard to deficit reduction, he has to veto the inevitable effort Congress will make to extend the Bush tax cuts. Since he's unlikely to get a bill that only raises taxes on the rich, he has to be brave enough to let them all expire. What's left of the middle class will manage with a little less money in their pockets.

What frightens me most is talk about "streamlining" the tax system — reducing the number of tax categories and eliminating most deductions. When it was done under Reagan in the eighties, it started the decline in taxation of the rich — and in the years since, just about all the corporate tax breaks that were eliminated at the time have been written back into the code, and then some.

We should not be worrying about deficit reduction now, in any event. Even with the so-called "downgrade" of US debt by S&P, we don't have any trouble borrowing at ridiculously low rates. We should be taking advantage of those ridiculously low rates to borrow the money we need to put people back to work. The best way to balance the budget is to expand the number of people earning good salaries and paying taxes.

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