Wednesday, December 08, 2010

The compromise where everyone loses

First off, there are plenty of things I LIKE about the compromise that President Obama hammered out with congressional leaders over the tax rates.
I like that he actually talked with republicans for the first time, rather than at them.
I like that he listened to the opposition for the first time, rather than simply dismissing them and dictating terms.
I like that a broad deal got done, rather than a narrow, marginal deal that appeased 5 wayward senators.

There's a lot that I don't like, though.
I don't like that the tax rates were, once again, temporary.  Either do it, or don't.  Quit dithering and kicking the can down the street.
I don't like the extension of unemployment benefits for yet another 13 months.  At some point these people need to be given incentives to get off their asses and find some work, even if it's a slightly lower paying job than the last one they had.  Waa waa waa, can't find jobs...  bullshit.  Get to work.
I don't like that expenses were still not reduced out of the budget.  Lack of revenue is not the problem, out of control spending is the problem.  If in 2 years they don't get spending under control, they're going to be forced to raise taxes, and not just on the wealthy, but on everybody.  And not just to 1996 levels, but higher.  And there's going to be considerable inflation coming with it, so not only is a greater portion of our money going to get pissed away to the feds, but what's left won't buy as much, either.

There's plenty to like.  The compromise did, after all, patch up a problem that was looming.
The problem isn't solved, though.  It's just been kicked down the road to the next election cycle.  Maybe Obama is planning on getting back his 60% majorities.  Maybe the Rs are thinking they'll take over both houses and the executive branch with 60% majorities.  I'm willing to bet money that neither scenario is going to happen.  At some point they're going to have to address the spending problem because China isn't going to unhitch their currency and let us inflate away our debt--and besides, we don't want all of our goods from China to suddenly start getting more expensive.  Super cheap consumer goods is one way it appears we're actually wealthy because our dollars stretch further to buy more crap.  When the crap gets expensive, then we don't feel quite so wealthy any more.

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