But the Conquered, or their Children, have no Court, no Arbitrator on Earth to appeal to. Then they may appeal, as Jephtha did, to Heaven, and repeat their Appeal, till they have recovered the native Right of their Ancestors, which was to have such a Legislative over them, as the Majority should approve, and freely acquiesce in.
-John Locke

Tuesday, July 12, 2011

US Default Watch, Part 4

Last week Charles Krauthammer provided this take on Obama's approach to deficit reduction.  It seems to reflect a high level of anger, which is understandable  - what is not understandable is that more Americans do not share this view!  Krauthammer points out Obama's attempts thus far at debt reduction:
• Ignored the debt problem for two years by kicking the can to a commission.
• Promptly ignored the commission’s December 2010 report.
• Delivered a State of the Union address in January that didn’t even mention the word “debt” until 35 minutes in.
• Delivered in February a budget so embarrassing — it actually increased the deficit — that the Democratic-controlled Senate rejected it 97 to 0.
• Took a budget mulligan with his April 13 debt-plan speech. Asked in Congress how this new “budget framework” would affect the actual federal budget, Congressional Budget Office Director Doug Elmendorf replied with a devastating “We don’t estimate speeches.” You can’t assign numbers to air.
 Krauthammer surmises the rationale behindit all:
         Obama has run disastrous annual deficits of around $1.5 trillion while insisting for months on a “clean” debt-ceiling increase, i.e., with no budget cuts at all. Yet suddenly he now rises to champion major long-term debt reduction, scorning any suggestions of a short-term debt-limit deal as can-kicking.
         The flip-flop is transparently political. A short-term deal means another debt-ceiling fight before Election Day, a debate that would put Obama on the defensive and distract from the Mediscare campaign to which the Democrats are clinging to save them in 2012.
A clever strategy it is: Do nothing (see above); invite the Republicans to propose real debt reduction first; and when they do — voting for the Ryan budget and its now infamous and courageous Medicare reform — demagogue them to death.
         And then up the ante by demanding Republican agreement to tax increases. So: First you get the GOP to seize the left’s third rail by daring to lay a finger on entitlements. Then you demand the GOP seize the right’s third rail by violating its no-tax pledge. A full-spectrum electrocution. Brilliant.
Obama has continued to rail against the Corporate Jet Owners as his personal whipping boys of greed.  He conveniently fails to remember that he supported the tax-break, the reason being that the private jet industry employs a lot of people.  But today it serves his purpose to trot them out as the example of everything that is wrong with our society.  Krauthammer does an interesting turn of math and solves for "X" thusly:
        And what have been Obama’s own debt-reduction ideas? In last week’s news conference, he railed against the tax break for corporate jet owners — six times.
        I did the math. If you collect that tax for the next 5,000 years — that is not a typo — it would equal the new debt Obama racked up last year alone. To put it another way, if we had levied this tax at the time of John the Baptist and collected it every year since — first in shekels, then in dollars — we would have 500 years to go before we could offset half of the debt added by Obama last year alone.
This is exactly the kind of fact-checking that every debt-reduction plan should be subjected to.  We are not impressed with bogeymen or greed-heads as scapegoats or false solutions.  Every plan needs to detail where the cuts are going to be and the actual result reflected in the balance sheet.  What Obama is suggesting is nothing more than more tactics of class warfare and attempts at wealth redistribution. 

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