Avoid the Cliff!

Avoid the Cliff!
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I’ve never been part of a formal negotiation before, but from what I hear it’s usually a fairly hellish ordeal. Hilariously unreasonable — even insulting — demands are presented under the guise of “starting positions,” emotional abuse is openly used to weaken resolve, and apocalyptic outcomes are predicted as the consequence of every minor concession. At the best of times, the process lags weeks simply due to mutual intransigence; a story in the Canadian headlines at the moment involves the Alberta government’s six-month effort to negotiate a contract with a new legal team — and that bid was supposedly rigged.

All this is a long way of saying that if you’re finding the current negotiations over the American “fiscal cliff” to be scary, vicious, immature, or pointlessly stubborn — well, that’s kind of the idea.

What exactly the “fiscal cliff” even is seems to be somewhat disputed, but in the easiest-to-digest sense, it’s simply a collection of deadlines and “triggers” set to occur on the date most normal people call “New Year’s Day” of 2013.

Most notably, January first heralds the formal expiration of the so-called “Bush tax cuts” (which “temporary” lowered rates for Americans of all brackets way back in 2001, but have been repeatedly renewed since) and initiates the mean-spirited, all-program spending cuts introduced in that “sequestration” deal both parties cobbled together in 2011 in an effort to scare themselves into being more productive in 2012 (and how well it worked!).

Added on top of those two biggies are some other expiration dates for a bunch of more minor tax credits and benefit programs, most of which are either related to the stimulus initiatives of the early Obama term, or are simply routine pieces of budget management legislation that are ordinarily renewed every year without controversy.

Anyway, economists have long argued that the threats posed by all these various things expiring and triggering at once would be severe, even from a pro-austerity perspective. Tax hikes and spending cuts may be reasonable deficit-and-debt fighting tools in theory, but like so much else in life, there are right and wrong ways to wield them in practice. The general consensus is that across-the-board tax hikes at the present moment would badly reduce consumer spending while simultaneously hiking unemployment, while vicious program cuts would similarly yield a harsh blow for all workers and industries dependant on government commerce — particularly the defense industry.

Now, for the last year, the conventional wisdom was that the threat posed by all this stuff happening at once would be so severe it would force the creation of some sort of bipartisan Congress-White House alterna-deal to avert it, and, as predicted, that’s exactly what’s happening now — sort of. Both the GOP-led House of Representatives and the Obama administration are indeed talking deals at present — the only problem is they’re mostly talking past each other.

President Obama’s fiscal cliff alternative, as he touted endlessly during the last election, is for the wealthiest Americans to “pay a little more” while simultaneously approving the renewal of the Bush tax cuts for everyone else, and implementing some vaguely-defined but supposedly “smarter” spending cuts rather than the draconian sequestration ones.

The Republicans, led by Speaker John Boehner, on the other hand, want a far more spending-centric approach, with the Bush tax cuts preserved for everyone, even the richies, and the revenue problem addressed through some equally vague changes to the tax code that would close loopholes and limit write-offs.

Both negotiation positions are thus a fairly predictable mix of stubbornness on matters of ideological principle coupled with a much more indifferent attitude towards actions philosophically unpopular with the two parties’ respective bases. Topped off, of course, with a great deal of hypocritical bluster that the “other side” is being maddeningly dogmatic.

The GOP has repeatedly asked, to no avail, to see the White House’s “ideas” for spending cuts, while the Dems have pressed in equal vain for greater Republican specifics on revenue. “No substantive progress has been made” said Speaker Boehner the other day.

With only a month to go before D-Day, it all seems rather depressing. That is, unless you read nonpartisan inside-the-beltway gossip sites like Politico, which insist the public war of words is really just so much Kabuki, and the two sides are actually vastly closer to a deal than their Sunday morning talking points claim.

In a recent piece rife with anonymous sources, Jim Vandehei and Mike Allen claim that shortly before Christmas, what’s almost certainly going to hashed out is some sort of compromise whereby Republicans agree to a tax hike on the wealthy (there’s “no chance taxes are not going up for people making north of $250,000” they say) on the condition that the hike is balanced by a numerically equal cut in spending. The latter, in turn, appears most likely to take the shape of “entitlement reform,” which is to say, cuts to Medicare “through a combination of means-testing, raising the retirement age and other ‘efficiencies’ to be named later.”

It is a supremely logical, adult solution, but of course politics is not very adult or logical these days, and part of the reason things are dragging on as long as they are is simply to slap some veneer of partisan credibility on a deal that’s would otherwise be (shudder) too bipartisan for either side.

Speaker Boehner, for his part, has to do some delicate salesmanship to his own caucus in order to win over the so-called “majority of the majority” in the House of Representatives, including more than a few Tea Partiers and Norquistites for whom any sort of tax raise will be a poison pill. President Obama’s game is obviously a bit easier, since he enjoys a more uncontested position as party boss, but he could easily lose that status in short order if Democrats in Congress are made to swallow a deal that seems too GOP-friendly — a la the widely unpopular debt-ceiling deal of last August.

There’s thus something more than a little darkly hilarious about a deal-making process that’s being protracted largely because two reasonable players are trying so hard to appear unreasonable.

But that, I suppose, is all part of the filthy art of negotiation.


  1. drs

    Just remember, a majority of Americans voted for Democratic House candidates, but gerrymandering let the GOP win a majority of seats while losing the vote. The will of the American people, such as it is, was for a wholly Democratic Congress.

  2. commanderkai

    Because the Democrats have never, ever used gerrymandering. Right? Certainly Democrat heavy states like California, Massachusetts, and Minnesota were certainly not designed to try to create more Democrat House members.

  3. Dryhad

    Part of the reason that gerrymandering worked in the Republicans' favour is that that California handed districting duties over to an independent commission. So no, California was certainly not designed to create more Democrat house members (your phrasing is strange, kind of like you think the entire state was founded for that reason, which is historically absurd so I assume that's not what you mean). In a perfect world every state would do that, but when only a handful do it throws out the balance.

  4. ThePsudo

    Disproportionate results are not alone proof of partisan gerrymandering in the system.

    How do you draw US House districts without gerrymandering? In a given state, each district needs an equal population and the simplest borders possible. Let's apply these principles to New York State (chosen because it has a huge city) and think about where to draw those districts.

    Because it's easier to determine geographically, let's think about urban vs. rural instead of Democrat vs. Republican. It is possible to draw simple shapes that mix suburban and urban folks in with the rural folks, but some urban centers have too many people between them and rural areas to connect both groups without complex borders. That means you're gonna have some 100% urban districts, and rural folks overrepresented in the rest of the districts precisely because you eliminated gerrymandering. That works everywhere that has large cities.

    As long as the urban population keeps growing as a proportion of total population, there are going to be more and more purely urban districts like that, which means more and more overrepresentation of rural interests in the House. As long as rural voters mostly vote Republican, that means district wins will be an ever-increasing distance away from the popular vote and towards a Republican bias.

    Gerrymandering could be used to correct for this effect (or worsen it, or create a bias the other direction), but eliminating gerrymandering can only overrepresent rural voters in a mostly-urban society. It is the logically inevitable result.

    The fact that rural folks don't always vote Republican and urban folks don't always vote Democrat reduces the gap between the popular vote and the composition of the House. If Democrats want the House, they either need rural voters or to eliminate geographical districts.

  5. drs

    Dude, the partisan gerrymandering itself was blatant and explicit. I'm not inferring it from the results, I'm pointing out the egregiousness of the results.

    I'm all for proportional representation by state, which Congress could mandate by law, but Iowa and now California have non-partisan districting commissions. Which Congress could probably also mandate; the entire system of single-member districts is mandated by USC › Title 2 › Chapter 1 › § 2c

  6. Jake_Ackers

    I think the Iowa method is unfair and causes disenfranchisement of voting blocks.

    For example (my math may not be correct but just take the idea):

    Iowa Method:
    District A) 55% Urban and 45% Rural
    District B) 55% Urban and 45% Rural

    "Gerrymandering" Method:
    District A) 100% Urban
    District B) 80% Rural 20% Urban

    See the difference? Farmers in the Iowa method would never have a true representative. The Representative would always vote in a way to keep their seat. Thus favoring policies of that side (55%) of their district. This disenfranchises an entire voting block, the other 45%.

    Note a district that votes 55% Dem and 45% GOP can still have one Representative voting to favor their entire district, if the entire district shares similar values.

    IE: 55% Dem versus 45% GOP but the entire district are comprised of casinos and casino workers. Voting to favor gambling benefits everyone. While in my prior example, a district can be 80% Dem or 50% GOP still have that urban/rural divide.

    My main point is this, gerrymandering for political reasons is wrong. But shaping districts to keep voting blocks intact is fair. The court have mandated that in fact for minorities. Thus why isn't the same logic used for farmers? Factory workers? Suburbs versus a Urban area? I think it's only fair to keep a voting block intact to have their views equally shown whether it be blacks, farmers or w/e else.

  7. @mikehatedit

    That's not how gerrymandering works. (In fact, the model you're arguing for here constitutes "cracking", a well-documented and easily-identified form of gerrymandering.)

  8. Jake_Ackers

    The Iowa method CAN result in cracking while the federal govt and courts mandate packing to benefit minorities.

    It's mandated for races by the federal gov't and the courts. So why not do that for all groups? If Latinos and Blacks get their own district in order to be better represented why not then other groups? Shouldn't districts be as homogenous as possible?

  9. @mikehatedit

    The court ruling was issued decades ago in an era when cracking minority populations into multiple districts essentially prevented from from reaching critical mass in any of them. It was a method of effective disfranchisement, which was where the problem emerged.

    Instead of focusing upon population demographics *at all* (beyond the basic need to maintain roughly equal population between districts), districts should be drawn as much as possible along obvious geographic features: city limits, rivers, county borders, major highways, etc.

    This is the model used in Canada, the United Kingdom, Australia, New Zealand, and countless other places, and it produces districts which are both far more competitive and far more representative than American ones.

    The ultimate solution is to get out of districts altogether, or to introduce multiple-member districts in order to create some form of proportionality. But if we must have districts, they should be drawn by non-partisan groups focused on concentrations of population and ensuring that legal communities are–as much as possible–kept together.

  10. Jake_Ackers

    Okay now we are on the same page. I agree with one small note. Districts that cover multiple cities should then try to shape around those borders while still adhering to some logic other than square randomness. Like if you have three small farming towns next to each other. Put them in the same district instead of purposefully split them up or splitting up one town across districts. I live in a town which is split across two districts, it is so annoying.

  11. Scott Jacobs

    Ignoring the fact that I'm pretty sure the Federal Government can't mandate how the districts are split up, "non-partisan redistricting commissions" are generally what you call a commission who's results you agree with – such a creature does not actually exist in nature.

    Gerrymandering and redistricting in general are inherently political – no party in power is going to allow for their power to be diminished, period.

  12. Dryhad

    Just because it's very difficult to make anything truly non-partisan doesn't mean it should be as partisan as possible. A non-partisan commission is one that is not beholden to the party in power (or any other party) so your appeal to parties in power makes me think you don't understand this.

  13. Scott Jacobs

    " your appeal to parties in power"

    I appeal to no one. I merely accept that nothing done by or on the behest of those in power will ever do anything to put their power in jeopardy.

    Why do you think it is so very difficult to get Third Party candidates on the ballot in almost every state? Could it be because neither Republicans nor Democrats have any interest in losing their hold on power?

  14. Dryhad

    If it's done at the behest of those in power then it's not non-partisan. Your mistake is assuming that it has to be done at the behest of those in power. It is not possible to remove political beliefs from human beings. It is possible to form a group that is not systematically beholden to the party in control of the legislature. It's certainly possible to make them less beholden that practically having the elected officials draw up the lines themselves.

  15. Jake_Ackers

    It isn't always nonpartisan even though it is suppose to be. Just ask the folks in NJ. The GOP didn't draw the map completely but they got the advantage with that last district.

  16. drs

    Nonetheless, the seats in California became much less safe, even for the Democratic majority. The commission worked.

    There's also simple algorithms, like splitline, that could take any human judgement out of the the system at all.

    I don't see why Congress can mandate the existence fo districts but not how they're drawn up. http://www.law.cornell.edu/uscode/text/2/2c

  17. @mikehatedit

    "such a creature does not actually exist in nature. "

    Canada, the United Kingdom, Australia, New Zealand…

  18. ThePsudo

    I don't know whether Congress can legally require the states use non-partisan commissions to redraw the districts without a constitutional amendment, but I'm for non-partisan redistricting committees either way. If it'll take a constitutional amendment, let's get a constitutional amendment.

    But the results of an election, no matter how egregious, cannot possibly prove the existence of gerrymandering without additional evidence besides. Imagine that you play three games of hockey. You win the first 3 to 0, and lose the next two 0:1 each. You just scored the most goals and lost the most games anyway, fair and square. You haven't offered any evidence that this election outcome is unlike those hockey games.

    At least match some twisted-looking districts to twisted results, or better yet prove intent to disenfranchise on behalf of someone who drew the twisted districts. Otherwise, you have only demonstrated a statistically rare outcome, not that intentional manipulation caused that outcome. I say this knowing full well that gerrymandering happens. You can't stop it if you can't prove that it's being used as an effective weapon against democracy to a legally relevant standard.

  19. drs

    I wasn't using the result as proof gerrymandering happened; I was pointing out the egregious result that gerrymandering gave us.

  20. @Cristiona

    Yup. GOP sure gerrymandered the hell out of Illinois.

  21. TAylor

    The real problem is the districts are way too big. 1 rep for 750k or so is ridiculous.

  22. Jake_Ackers

    If it was made smaller the country would have a 1000 plus member house. Representatives by themselves don't do much anyway when compare to Seniors. It's the House collective power that does quite a bit. Although to be honest it might be better to have a larger House. Might force them collectively to work together.

    Or it could make it worst because with a larger House, it means each individual is less important thus they get elected more and more based on party identity versus candidate profile.

  23. ThePsudo

    New Hampshire's state House has one representative for every 3,300 people, 400 total. There is an argument to be made in favor of lots of very local folks populating the House. Personal contact with the constituency, the financial strain of the parties funding every House race would likely loosen party ties and promote free-thought, etc.

    I think a House of thousands would be pretty interesting. http://tinyurl.com/big-senate

  24. Jake_Ackers

    Good point, especially on the financial side. McCain Feingold would have to be completely thrown out though.

    However, imagine how freaken big DC will become. The metro area at least. VA will turn primarily Democrat. That or North VA will become a state. Which frankly it should as should Eastern California (ino way Dems will simply get two free Senate seats)

  25. @mikehatedit

    "If it was made smaller the country would have a 1000 plus member house. "


  26. Taylor

    Exactly. Less incentive to be a drone, too, as it's harder to advance in party ranks, so you may as well just follow your constituents.

  27. Jake_Ackers

    That figure is misleading. My math may be off, but because the GOP represents smaller states the GOP districts fall on the lower end of people per district. There is a range of population per district. It might not be much but I am sure it adds up.

  28. drs

    There's a range and it's not biased in any particular way. I've checked. A small state can easily have oversized districts as well as undersized ones, because there's not quite enough people to justify having a second district.

  29. drs

    Sure they have, and I'm all for ending gerrymandering. Doesn't it make it not worth pointing out that the House GOP have a false majority.
    And from what I've read, the actual result of a majority of seats having a minority of votes has not been common in the House. Second times since WWII, if I recall correctly.

  30. Jake_Ackers

    You are moving the goal post. It's like a soccer match. The GOP out scored the Dems but since the Dems have more possession of the ball, it means they should of won?

    The Dem House vote was less than a million more. Who is to say that it would be that close if it was a straight up vote for Dem versus GOP? In fact the Generic Congressional Vote had the GOP up by 0.2% on RCP.

    Plus take Wyoming they have a lot less has votes than Delaware does. Both are single district states. Thus Delaware accounts for almost 300,000 votes above the average of district votes.
    Wyoming falls almost 100,000 under the average. The swing in between two states alone together take into account almost half of the million extra votes the Dems gor in the House. Again this is just an example. I just went to an extreme to make a point. I know it varies by state and districts. Some GOP/Dems districts are more and some are less. IE: South Dakota versus Vermont.

    However, my point still stands. On average GOP districts are in smaller states with smaller populations thus less on average per district vote. Gerrymandering or not. It's going to be smaller on average because the states on average are smaller. Even if it is by a tiny margin of a few thousands votes.

  31. drs

    "Moving the goal posts"? No. The Republican got fewer votes, but got 54% of the seats, and Boehner's treating that as a mandate of some sort.

  32. Scott Jacobs

    Because "divided government" has never happened before in the history of the world.

    You are suggesting that in 2006, Democrats should have done whatever Republicans told them because they had control of the White House.

  33. Jake_Ackers

    If it was a straight up GOP v Dem vote then the result might of been different. You are assuming if its a straight up vote the Dems would of won. That doesn't mean anything. Plus all legislatures in every country can have this problem. Thus is the nature of districts. If it was a straight up vote, the turnout could of been different.

    Maybe the GOP districts only have less of a popular vote because they are in states that aren't as competitive. Thus a smaller turnout. You are judging the election based on popular vote. The popular vote is irrelevant because it is not how wins are counted.

    If a national popular vote was the only way to decide the House, then the election results would of been different. Turnout would of been different. You keep judging the results based on popular vote, if it was the deciding factor the results would of been different. After all like I pointed out before. RCP had the GOP up on the generic congressional ballot. You keep judging the House election on popular votes when it isn't even the deciding factor for who controls the House.

  34. Colin Minich

    Of course this is also a battle that the Norquists of the room are doomed to fail. Even Saxby Chambliss has relented to the reality that taxes/revenue has to go up and spending cuts along will not suffice. Of course Grover in his 12-year-old mindset where he got his pledge (if I recall correctly) now vows to ruin anyone who breaks the so-called "pledge." You cannot starve the beast. It's just not possible especially for a global power such as the United States and while people hound the government about maintaining that power with its foreign policy. I can only hope when the tax cuts end and when the $250K+ see their taxes go up and when we get a sensible spending cut policy, people like Norquist and Ron Paul (thank God he finally gave up) will forever remain irrelevant.

    This will be a time where idealism, in my opinion, has to go. Idealism is currently getting us in a stalemate and very little is improving because of such things.

  35. Jake_Ackers

    Well the lack of revenue today is because we are in a recession. If we weren't revenue would be back to normal. But spending would still be horrid. What I fear is a Greece situation that you have a deadly cocktail of spending cuts and tax increases. Spending cuts stop any jobs and growth the gov't was providing and increasing taxes stops any the private sector would of provided. Thus no growth and a potential new recession.

    It is a dangerous cycle. Cause you lose money so they go and raise taxes again and cause of less revenue they cut spending again. The idea is to save in a good economy (whether its cuts or taxes or both) to spend in a bad one (whether its spending or decreased revenue or both). But we are so much in debt its not possible now to operate in the same way we did back in the 80s or 90s.

    One note I would like to make is this. I think Trenacker touched on this before in another article. We are going after one group of people to pay for the services of the other group. Why is it "patriotic" to pay more in taxes but never to "patriotic" to stop relying on gov't services? The rich have been paying their taxes, it's gov't who has spent more as a result. Now there are those who commit fraud or evasion.Which then goes to my point of lets cut the loopholes and deductions to increase revenue. That won't hurt the economy like a straight up rate increase would.

  36. drs

    If we weren't in a recession spending wouldn't be so horrid. The large deficits right now are because of both huge falls in tax revenue and large rises in safety net spending, both automatic and extended by Congress. Unemployment insurance, food stamps, stimulus aid to the states to avoid laying off teachers and policemen, stuff like that.

    "never to "patriotic" to stop relying on gov't services" People stop 'relying' on services by getting jobs. Which they can't, because we're in a recession. It's not like they aren't applying for jobs.

    "The rich have been paying their taxes" The rich have been paying a lot less than they used to, while making more and more. And most of the debt was spent by the same Republican politicians who cut taxes.

    The biggest 'loophole' is the low tax rate on capital gains. As for hurting the economy, more tax revenue is more tax revenue, it doesn't much matter whether it's from rates or closed loopholes.

  37. Scott Jacobs

    Actually spending would be – remember, only in 2008 did we have the stimulus money come out of the budget. After that it has been shiny feel good project after another, plus 60% of the budget that would be EXACTLY the same no matter WHAT happened.

    You can not point to a single budget item and say "because of the recession" after 2008.

    Granted, Democrats have refused to even TRY to pass a budget, but you know what I mean…

  38. Jake_Ackers

    If you raise the capital gains tax, investors will go to another country and thus less money invested in the US. More unemployment.

    And yes it does matter whether it's from rates or closed loopholes. Closed loopholes results in a simplified tax code. The actual rate would be lower. A simplier tax code discourages people from putting money in tax shelters and spend money on expensive attorneys. It's much more worth paying a lower tax rate than having to shift your money around to avoid a paying taxes when the rate is higher.

    Also we have almost $1trillion in uncollected tax revenue. That is because the code is a mess. A simpler code will result in more revenue simply because most people will be paying into it.

  39. Jake_Ackers

    In the end the rate will lower or stay about the same but revenue will be increased because they will simply cut out all the tax deductions and loopholes. It doesn't have the same effect as saying "TAX RATE INCREASE!!!" Cutting loopholes/deductions results in more revenue. The EFFECTIVE tax rate will go up for the wealthy but the marginal rate that everyone sees will stay or go down. No way Obama will get his minimum 30% effective tax rate. That is doubling the effective tax rate for the wealthy which is 15% right now. I can see the effective rate going up to 17 or 18 or even 20 as a result of the closing of the loopholes and deductions.

    Either way, spending is ridiculously high. Even if revenue is to increase with w/e method, the spending is way too high. Why doesn't both sides just cut the budget down the middle. Give the Dems the social programs half and tell them to cut a $250billion. And then get the GOP to do the same with the Defense side of the budget. In the end you get $500billion in cuts and in less than one term you eliminate the deficit. Assuming they don't add extra spending during the year.

  40. Scott Jacobs

    Because the budget can't be cut down the middle.

    Even if every single penny of discretionary spending were eliminated (that means zero energy subsidies to ANYONE – and Green gets more than oil and coal, btw – no food stamps, and a military budget of zero dollars, and federal employees getting not one single penny in pay), the total federal budget would still be about 60% of what it is today.

    That means if the budget that gets passes was exactly one page long and said "we spend nothing", would would only spend 40% less than we do now.

    And that is because Social Security and Medicare are not part of the budgetary process – they are non-discretionary spending items that are handled through completely different bills.

    And thus you start to see the problem…

  41. Jake_Ackers

    I get that. But just lump w/e the Dems usually favor on their side (that includes social programs) and w/e the GOP usually favor on their side. That way no side can whine about hurting their base.

    But I guess you do have a point. This would require multiple bills to fix this spending mess. Good point.

  42. Scott Jacobs

    It isn't the bills that kills it – until such time as we are absolutely out of money (about 1 week after a failed Bond Auction, when the world realizes WE fun most of our own debt via the Treasury) Social Security and Medicare are untouchable.

    Paul Ryan was accused of trying to KILL Social Security when he suggested increasing the retirement age. Where the HELL do you think the political will come from to make actual, deep cuts if we can't even slightly modify it?

  43. drs

    Paul Ryan didn't just want to raise the retirement age, he wanted to trash SS as we know it and turn it into a mandate to invest in the stock market.

  44. Scott Jacobs

    "Mandate" means "required". He was suggesting it be an option.

    But thank you for proving my point entirely. That was very kind of you.

    How does it feel to be the reason the US will go bankrupt?

  45. Scott Jacobs

    Also, cutting 500 billion doesn't eliminate the deficit – it takes the deficit down to about 600 billion.

  46. Jake_Ackers

    I meant do it every year. Thus, " in less than one term you eliminate the deficit."

  47. Scott Jacobs

    See my prior statements – if we can't even REFORM mandatory spending, we such as hell won't ever CUT the spending.

    And since current revenue can't cover the roughly 60% of the budget that is fixed PLUS service on the debt, you can neither eliminate the deficit (because there is no way the economy will survive the end of all discretionary spending, meaning revenue for the govt will plummet), nor could you even touch the national debt – in fact, it would only grow.

    When I say "there is no avoiding the cliff, the only choice we have is how fast we are going when we go over", I am not being hyperbolic. It is inevitable.

    And anyways, this assumes the country would even stand for such measures. Look to Greece to see how such suggestions are met by a public that has become used to it's ability to vote itself largesse on the backs of others.

  48. Jake_Ackers

    True that!

  49. drs

    Which loopholes would you close, that are big enough to balance the budget?
    Which spending would you cut, by how much?

  50. Jake_Ackers

    Close all the loopholes and deductions except for charity. And cutting would need a reform on how the military is structured. Cut the Navy and shift that to the Coast Guard. Cut the Army and shift it towards National Guard and Reserve. Close bases in countries we clearly don't need and increase the Air Force and Special Forces. The social spending will depend more on how they want to reform it. So that is a complete other discussion.

  51. Guest

    You are talking about eliminating probably MILLIONS of jobs.
    If you think the economy is bad now, try this plan out and see how things look.
    This would mean the end of entire cities…
    You might just get a big decrease in military spending but social welfare costs would surely skyrocket.

  52. Jake_Ackers

    Actually no. Because the troops would be based in the USA instead of abroad. And any cut in one branch is offset by an increase in another. The Navy is based outside the US in some parts. Those sailors would be brought back home. The Coast Guard would increase in size and protect the homefront. Thus more of our tax dollars spent at home. More economic growth.

    Same would happen for the Army, shift to National Guard and Reserve and a larger Airforce. Same amount still employed but less money spent on equipment that would be used abroad. Save money in the long run. Money that is spent is spent closer to home. Furthermore, the CG and NG would help the domestic policing like the ATF, FBI,DEA and ICE. Again saving money but employing people at home, which means money spent in the US and not abroad.

    Towns abroad might close or get smaller but the ones here would grow.

  53. Scott Jacobs

    The problem is that, as is always the case, tax hikes are being required by the Democrats with promises of spending cuts to come…

    That has ALWAYS been the promise, and it has NEVER happened.

    It is not possible to raise taxes enough to cover current spending – it simply isn't. And if Democrats wanted to expire a since tax cut that would generate the most revenue, they would let the MIDDLE CLASS cuts expire.

    But the fact remains, not a single hike suggested will close the gap. It isn't a revenue problem (revenue is up 19% from 2009), it is a spending problem. All arguments to the contrary ignore the fact that we don't take in enough to cover mandatory spending (Social Security and Medicare) and service on the debt we have.

    Will taxes have to go up? Absolutely.

    The problem is, spending will have to be cut even more, but that is never going to happen.

    We're going over the cliff, period. There is no avoiding it.

    The only thing left is how fast weren't going when we go over.

  54. Jake_Ackers

    True. No matter what the tax rate is, revenue is always ABOUT 20% of GDP. Right now it is under the 20 but that's because the economy is in the tank.

    Spending has to be cut and it never will be cut the amount it needs. Nor will raising taxes be enough. The economy has to grow. And a massive axe needs to be taken to these programs.

    Plus one single problem no one ever talks about is this, the POPULATION. We are the 3rd largest country in the world. The USA cannot sustain this level of spending or this form of federalism for much longer. Half a billion in the next few decades. 750 million people soon after. No way we can sustain a population of that size with how we operate right now.

  55. Etc.

    Where in the world are you getting those figures for population increase? The fertility rate is low enough that the USA is just about at replacement rate and is only dropping as time goes by, so our population growth is pretty much solely being driven by immigration… the rates of which are definitely not near high enough to bring us to a population of a half billion in a couple of decades.

    This is actually a part of the problem; we have huge amounts of old people who have, as they put it 'been paying into the system all of their lives' who are politically powerful and annihilate politicians intending to reform or cut their benefits, while there are far less young people working to support them than their parent's generations.

  56. Jake_Ackers


    A billion by 2100. Or

    500 million by 2100. Hence next few decades. Since immigration and global birth rates will be in a decline the second one seems more realistic.

    However, my main point still stands. And you alluded to it. We can't sustain this kind of spending for long.

  57. drs

    "It is not possible to raise taxes enough to cover current spending – it simply isn't. And if Democrats wanted to expire a since tax cut that would generate the most revenue, they would let the MIDDLE CLASS cuts expire. "

    That's absurd. Of course we can. We have the lowest tax rates in decades, and among the lowest taxes in the developed world. We've had 30 years of tax cuts and, surprise, deficit spending.

    " It isn't a revenue problem (revenue is up 19% from 2009)"

    Blatant cherry-picking. 2009 is in the depth of the recession. A more relevant comparison would be to 2007 income, before the recession. It's most certainly a revenue problem, though it's really a recession and unemployment problem, since that drives both the low revenues and the high spending (food stamps, unemployment insurance). Fix the economy with Keynesian means and we'd both raise revenue and reduce spending.

    And if you believe there's a fiscal cliff, then you must believe in Keynesianism. Austerity logic should view the 'fiscal cliff' as a great thing that will simply reduce the deficit.

  58. Jake_Ackers

    I agree with you in part. The middle class tax revenue isn't that much. And yes our revenue is down because of the recession and unemployment which does result in less revenue and more spending.

    However, even if one believes in Keynesian economics, the problem is we can't afford it. The idea is to save in a good economy to spend in a bad one. Problem is we are in massive debt, so we can't spend.

  59. Guest

    "Problem is we are in massive debt, so we can't spend."
    That's not really the case, credit is still pretty cheap for the federal government. The cost of servicing the debt might be higher if you spend now, the economy recovers, and people start moving their money out of government bonds and into private investment (though you can then claim it back in tax revenues) – but it will be higher still if you cut now, unemployment grows, revenue drops further and spending has to increase.

    Currently, the markets are saying that government should invest. Do you believe the markets?

  60. EBounding

    Taxing the people who are the most creative and able to avoid taxes (the rich) is a quick political shortcut, but not a solution to the problem. The problem is spending and neither side wants to take the political heat for making the necessary changes for non-discretionary and military spending.

  61. Eric

    But the Ryan plan did present a solution, and Romney/Ryan won the seniors. The GOP has put up two plans to deal with entitlements the Dems haven't even proposed a legally required budget in the past three years. The Dems demagogue and win. The lesson here is not a positive one if you are interested in solutions.

  62. Colin Minich

    IIRC the Ryan plan was also one of some pretty harsh austerity and would've been lambasted by the GOP eventually when it came to any mere mention tax revenue. Frankly I'm shocked you actually bought it, what with the Grover Norquists running about in the party ranks. The poor would've been screwed over hard.

  63. drs

    Democrats did do well in California, but with the new commission, this can be attributed more to the actual will of the people than to Democrats drawing the districts to favor themselves. They actually had a fair bit of turnover.

  64. GoSign

    It looks like nobody's really talking about cutting military spending, even though that's the largest chunk of federal spending. Is that still political suicide, even with rising war-weariness?

  65. Scott Jacobs

    Ignoring the fact that you're an idiot and it is NOT the "largest chunk of federal spending", How much should get cut? The military has ALREADY had to deal with almost half a trillion in cuts. Where do you suggest they cut, hmm?

    Yes there are areas in defense spending that can be cut, but you can not cut 2/3 of the defense budget and lose the ability to do anything, anywhere, for any reason.

    We would cease being able to project power or even defend our shipping interests.

    But then again, you think that something that is 22% and 21% of federal spending is smaller than 20% of spending, so I'm not entirely surprised. The left has always considered the military to only place where cuts can occur.

  66. Rachel

    "The military has ALREADY had to deal with almost half a trillion in cuts."

    The way these cuts are being instituted over the next 10 years, the defense department cuts will not be cutting into the actual budget so much as being canceled out by growth that had already been scheduled.

    You're right, though, defense department spending is only the largest part of discretionary spending and not the overall federal budget. Medicare is only facing a 2% cut, and with population growth over the next 10 years being what it is, the same argument I just threw out for defense spending applies to it, too.

    You might want to tone down the language, though. I might also reply that the right has always considered the military the only place where cuts can't occur.

  67. Dryhad

    I daresay the Republicans came out better than they would have if the divisions had been gerrymandered in the Democrats' favour. Do you (or commanderkai) think that somehow Democratic prominence in a consistently blue state is the result of a biased commission?

  68. Guest

    The USA is a relatively low tax jurisdiction and if the political will were there some small tax rises wouldn't be the end of the world.
    However, in order for those tax increases to actually do anything there needs to be concessions on the other side of the legder too – spending your increased tax take is crazy and will mean things only get worse.
    What is even crazier is that so many households pay virtually nothing in tax and the inefficiencies of returning tax to the middle class is monstrous.
    Simplification and harmonisation of the tax and social security system is necessary.