Tuesday, March 01, 2011

Boener Blinks

Well, well, well....suddenly the Teabag has lost its flavor....
House Speaker John A. Boehner (R-Ohio) told a convention of religious broadcasters in Nashville on Sunday evening that a federal government shutdown was not appropriate and not what the electorate wanted.

His remarks were the latest sign that congressional leaders were backing away from the brink of a shutdown.

"Americans want the government to stay open, and they want it to spend less money," Boehner said. "We don't need to shut down the government to accomplish that. We just need to do what the American people are asking of us."

In other words, it's business as usual. That's going to piss off the Teabaggers mightily, many of whom believe the only way to restore sanity to the budget process is to shut the thing down.

The Republicans are in a tough spot, to be sure. This is a giant game of Steal The Bacon, and Obama and the Democrats know all they have to do is prevent the Republicans from bringing the pork back to their side and the game is won. In other words, the Republicans will have to make a proposal that truly makes the necessary cuts to the budget to bring some form of fiscal stability back. Obama's budget proposal was nothing but a gauntlet thrown down.

In order to truly reduce the size of government, three things have to happen. Unfortunately, all three of those things are guaranteed...well, two are. One is unproven...to stifle any economic recovery:

  1. Defense spending has to be cut. Unfortunately, defense spending is the one guaranteed job creating program for the district in which the contract is awarded, including the contract for the F-35 engine, the biggest boondoggle in the current developing Pentagon arsenal, and oh by the way, built in Boener's home state of Ohio!
  2. Social Security and Medicare have to be reined in somehow. Now, you can't cut current spending. Remember all those elderly Teabaggers with their "keep your government hands off my Medicare" signs? You can cap the cost of living adjustments (COLAs) by faking a zero inflation number, which is accomplished by using core inflation, which excludes food and energy costs, which are "too volatile" to be useful. Are you kidding me? In a day and age when stock traders have software that can suss out microscopic inefficiencies and exploit them for millions in profits, we can't find someone to write a fractal-based program that can include the two biggests costs to an American family?
  3. Taxes must be raised. Now, no one is going to propose this without a healthy dose of political cover, because the Teabaggers will flip out, and you know what that means: no more GOP.
Of those three items, only taxes has been unproven to have much direct impact on economic growth. Indeed, one can make the case, as I often have, that the Clinton tax hike on the rich, while lowering taxes on the working and middle classes, actually created robust and exuberant economic growth that was struggling to even begin to break thru when he took office.
Defense spending and social programs that funnel money directly to taxpayers are vital cogs in the economic activity of this nation. Some defense spending clearly can be cut. The F-35 is an example of a program that no one, not even the Pentagon, really wants and is make-work to bolster the bottom lines of the Carlyle Group and Pratt & Whitney. Still, even these are minimal compared to what would happen to deficits should the economy make a startling comeback in the next few years.
It's hard to believe that, just ten years ago, we were running budget surpluses that would pay down the national debt eventually, only to have Republicans decide that deficits don't matter and that matter belongs in the pockets of Americans.
Well, it never made it there, did it?