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The Republicans in Congress have unintentionally put us on a path to balance the Federal budget with tax increases, large cuts in military spending, and no cuts to Medicare or Social Security. Only President Obama stands in the way of that happening.

The "Supercongress" is going to fail. That is a near certainty. The result will be, barring legislative action, $1.2 trillion in spending cuts starting at the exact same time the extended Bush era tax cuts expire. In order to nullify the trigger, or extend the Bush tax cuts beyond 2012, Obama would need to sign legislation. If such legislation reaches his desk, all he need do is veto it and we'll have a balanced budget or something close to that in the long run, tax increases that predominantly affect the rich, with no cuts to Social Security or Medicare which are exempt from the spending cuts required by the trigger.

It's not a perfect solution. In fact it's not a very good one, but it may be better than all the other options. Tax increases on the middle class combined with painful cuts to other important programs that benefit the poor and middle class will be hard to swallow. But all things considered, given the other options, which all seem to include cuts to Medicare, this might be the best path to balance the budget while minimizing the economic effects of budget cuts.

If there are better options that are viable, given a Republican majority in the House and filibuster power in the Senate, I'd love to hear them.

I question whether or not Obama would go along with deep defense cuts and a tax increase on the middle class. I suspect, given the opportunity, he would favor cuts in Medicare over defense, and would not pass on an opportunity to sign such legislation into law.

Originally posted to Sarge in Seattle on Sun Nov 20, 2011 at 12:06 PM PST.

Also republished by PacNW Kossacks.

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Comment Preferences

  •  Tip Jar (9+ / 0-)

    Working people of America unite.

    by Sarge in Seattle on Sat Nov 19, 2011 at 10:41:02 AM PST

  •  Will he? (3+ / 0-)
    Recommended by:
    Sarge in Seattle, Johnny Q, bear83

    Dunno.

    Should he?

    Damn skippy!

    Biggest problem for the Republicans is that they have no entre toextend the cuts now: nothing to hold hostage. The Stuporcommittee was a poorly thought out exercise for them. Doing bothing will comw back to bite them in the ass next year. Doing nothing on this will help Obama win his second term.

    I look forward to Mitch McConnell having a coniption!

    Float like a manhole cover, sting like a sash weight! Clean Coal Is A Clinker!

    by JeffW on Sun Nov 20, 2011 at 12:15:29 PM PST

  •  hard to say (3+ / 0-)
    Recommended by:
    Sarge in Seattle, JeffW, bear83

    If he fails to extend the bush tax cuts the 2012 election will be about Obama raising everyone's taxes except maybe this time people may say he needs to.
    Obama just need to say that act no one will be to reinstate the middle class rates and if it isn't done blame republicans because they want to protect the top 1%.

  •  Let the Bush tax cuts expire, everybody wins (6+ / 0-)

    I'm still upset he didn't do this a year ago.

  •  Obviously, Obama won't do that. (1+ / 0-)
    Recommended by:
    Sarge in Seattle

    Obama Re-Elect is already going with a populist message and isn't going to bet on his ability to convince the entire country they need a tax hike.  Anyone who is expecting that is going to be disappointed.  He will do what he did in 2010: call for them to expire tax cut for just the richest 2% though that obviously won't pass this congress.

  •  Please stop demanding balanced budgets (3+ / 0-)
    Recommended by:
    akeitz, denise b, JeffW

    they are stupid and counterproductive.

    Balanced budgets and depressions
    American Journal of Economics and Sociology, The,  April, 1996  by Frederick C. Thayer

    Since 1791, the earliest data available, the national debt has been increased in 112 years, decreased in 93 years. 57 of those balanced-budget, debt-reduction years have been concentrated in six sustained periods of varying length. Also since 1791, there have been six significant economic depressions among the innumerable "business cycles." Each sustained period of budget-balancing was immediately followed by a significant depression. There are as yet no exceptions to this historical pattern.

    This is the record of six depressions:

    1. 1817-21: in five years, the national debt was reduced by 29 percent, to $90 million. A depression began in 1819.

    2. 1823-36: in 14 years, the debt was reduced by 99.7 percent, to $38,000. A depression began in 1837.

    3. 1852-57: in six years, the debt was reduced by 59 percent, to $28.7 million. A depression began in 1857.

    4. 1867-73: in seven years, the debt was reduced by 27 percent, to $2.2 billion. A depression began in 1873.

    5. 1880-93: in 14 years, the debt was reduced by 57 percent, to $1 billion. A depression began in 1893.

    6. 1920-30: in 11 years, the debt was reduced by 36 percent, to $16.2 billion. A depression began in 1929.

    There has been no sustained period of budget-balancing since 1920-30, and no new depression, the longest such period in our history.

    The question is whether this consistent pattern of balance the budget-reduce the national debt-have a big depression is anything other than a set of coincidences. According to economic myths, none of these sequences should have occurred at all. How on earth, for example, could we virtually wipe out the national debt in the mid-1830s, then fall immediately into one of the six recognized collapses in our history? Those who write about the desirability of reducing the national debt frequently praise Andrew Jackson for his vigorous pursuit of such a goal, but do not mention "depression" in the same breath. It is helpful to the maintenance of economic myth to say little about depressions in textbooks, thus making it easy to avoid looking at connections considered impossible anyway.

    The mutual finger-pointing now underway is aimed at the 1996 elections, Democrats and Republicans each blaming the other for the agreed disaster of high deficits and debt. Yet the deficits of the 1930s and recent years were trivial, relative to GNP, when compared with the wartime deficits of the 1940s that ended the Great Depression. Federal deficits in World War II ranged from 20 to 31 percent of Gross National Product. For a few years, the national debt was greater than GNP, the only such period in U.S. history.

    The national debt is now less than 70 percent of Gross National Product (GNP), much below the 130 percent debt of the late 1940s, and a debt that remained higher than today's debt until the mid-1950s. According to economic myths, that wartime spending should have made things worse, not better.

    Those who look closely, therefore, will see some obvious intellectual dishonesty at work. It is dishonest to avoid looking at depressions and wars when discussing the evils of deficits and debt, and to propagandize by using absolute levels of deficits and debt when only relative comparisons are valid. It is dishonest to write textbooks in which there is no mention of what Herbert Hoover, Franklin Roosevelt, and noted financier, Bernard Baruch, had to say in the early 1930s about causes of the Great Depression. The belief at that time, even if rejected by economists, was that "overproduction," "excessive" and "destructive" competition were to blame. To be sure, nobody has suggested that government underspending can massively contribute to big depressions, even though this is only the flip side of overproduction. Put another way, if the market for consumer goods cannot do the job, there is every reason to turn to the production of public goods, always in short supply anyway.

    The tragicomedy of economics is easily displayed. If someone borrows money to build a brewery, the money is officially listed as "investment" in national income accounts. If government borrows money to build a bridge that is needed by the brewery, these funds are not listed as "investment" because the bridge is considered "waste." To think that this sort of logic undergirds public policy is to experience pure fright. Economics, of course, is not the only "discipline" that fills the world with unsupportable myth, but it is among the leaders.

    [Frederick C. Thayer is a Visiting Professor of Public Administration, George Washington University, Washington, DC 20036 and Professor Emeritus, Public and International Affairs, University of Pittsburgh.]

    COPYRIGHT 1996 American Journal of Economics and Sociology, Inc.
    COPYRIGHT 2004 Gale Group

    Professor Thayer wrote that in 1996, then Clinton balanced the budget and here we are, in the 10th year of an ongoing depression for 90% of us and soaking in phony statistics.  Please stop demanding balanced budgets. The are among the Republican stupidity that we need to stop.

    "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

    by johnmorris on Sun Nov 20, 2011 at 03:11:00 PM PST

  •  Does the federal budget (1+ / 0-)
    Recommended by:
    Setsuna Mudo

    need to be balanced?

    We decided to move the center farther to the right by starting the whole debate from a far-right position to begin with. - Former House Majority Leader Tom DeLay

    by denise b on Sun Nov 20, 2011 at 03:45:45 PM PST

    •  Short answer? No. (0+ / 0-)

      Long answer: because of Bush, sorta, what a lot of people here fail to appreciate is that meaningful deficit spending really is made tougher by the huge debt Bush ran up, if this crash woulda happened right after Clinton...? We'd be in a lot better shape. But I don't really want to go into it here since people here seem to have chosen to adopt this ridiculous reactionary way of responding to the idea of balancing the budget, either way though there are easier ways to do it; repealing the bush taxes, modestly cranking up taxes on the wealthy and a few modest trimmings of our defense spending would pretty much do it.

      Yami Yugi: Wait a minute! Did you just summon a bunch of monsters in one turn? Seto Kaiba: Yeah. So? Yami: That's against the rules, isn't it? Kaiba: Screw the rules, I have money! — Episode 1, Yu-Gi-Oh! The Abridged Series

      by Setsuna Mudo on Sun Nov 20, 2011 at 03:57:39 PM PST

      [ Parent ]

  •  It's sad (0+ / 0-)

    that it takes these draconian across the board cuts for us to make a meaningful cut to defense spending.

    Yami Yugi: Wait a minute! Did you just summon a bunch of monsters in one turn? Seto Kaiba: Yeah. So? Yami: That's against the rules, isn't it? Kaiba: Screw the rules, I have money! — Episode 1, Yu-Gi-Oh! The Abridged Series

    by Setsuna Mudo on Sun Nov 20, 2011 at 03:50:46 PM PST

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