I said to friends at the time of the Clinton tax increases in 1993 that it was a very dangerous moment for America...Ronald Reagan had convinced the majority of the people that lowering taxes RAISED revenue (remember the aptly named Laffer curve?)--- and that all we needed to do to balance the budget was to cut taxes for everyone. Especially millionaires and billionaires.
By the end of Reagan's Presidency it was apparent to grownups that lowering taxes simply increases the debt. That's why, when George H.W. Bush raised taxes, it was a welcome relief. After all, the deficit had reached ~$290B, and Bush 41 was genuinely worried about out fiscal future. But there was an open revolt in the Republican party and Crazy Alan Greenspan was seriously pissed.
Bush 41 argues that Greenspan raised rates in 1991-92 as an act of spite, and after reading Greenspan's book, I'm not sure he's wrong...
So now we had one of the two major parties without any reality-contact, as well as the most respected Fed Chairman of all time...The same Fed Chairman who would urge tax cuts in 2001 because "our surplus was too big".
All it would take to lose America was to have a Democratic tax increase followed by Congressional losses in the next election. And that is precisely what happened in 1993. Some of you may remember that Marjorie Margolies Mezvinsky cast one of the crucial votes on that Clinton tax increase -- knowing that it meant she would lose the next election (as she did). Mezvinsky is now Chelsea Clinton's mother-in-law, BTW...
Now, raising taxes in 1993 was exactly the right thing to do (just as it is today, IMO). And the economy boomed as a result. But it was portrayed as the "largest tax increase in history" (which was nonsense, since it ignored inflation). Clinton made a lot of mistakes in the first couple of years (Hillary-care, DADT, etc), but when the Democrats lost 50-some seats in 1994, the Democratic politicians learned the wrong lesson: ALL TAX INCREASES ARE A POLITICAL DEATH SENTENCE.
So now we have yet another "3rd-rail of American Politics" (in addition to Social Security): raising taxes. This is a disaster for our future. When the economy is weak, we apply Keynesian stimulus (lowering taxes and increasing spending); but when the economy is strong, we apparently can't raise taxes to eliminate deficits accumulated from earlier recessions.
And now we are seeing the fruits of the disaster. When something like 67% of the American people are opposed to tax cuts for millionaires and billionaires, and we can't even get all of the DEMOCRATS to vote for the tax bill (yesterday)? Horrendous!
I sensed that we lost America in 1995, but now I'm sure. The game is over. We've lost. Even a near catastrophe (the Great Recession) couldn't shake us out of our mental lethargy. If that event couldn't wake us up, it is over.
IMO, Barack Obama has done (only) two things that were/are 'unforgivable'. The first was the mishandling of the mortgage crisis. More relevant to this diary:
Failing to attempt to change America's attitude toward tax increases - to make paying a fair share of taxes (especially the well-off) an act of loyalty, of patriotism. To explain to America that we are not over-taxed; that we must raise taxes to move the deficit in a direction that gives the world confidence that America has not lost its mind.
I wish I could say something hopeful --- I can't. Reaganism started us to the path of destruction, Alan Greenspan increased the slope of our downward slide, but it took Democratic cooperation to make a true catastrophe. Ironically, the Clinton tax increase that led to the longest, strongest boom of the century --- led to the loss of America. Grover Norquist and his fellow psychopaths have won.
BTW, this is not particularly an anti-Obama diary. He is just the person at the end of a 15-year chain of Democratic moral cowardice.