Thursday, February 17, 2011
Chicago Boyz thinks Barack Obama's budget is far from a failure of leadership but a trap for the GOP. The back and forth and updates in the post are quite interesting, to which I would add that my chief concern is that most American voters cannot do the math to comprehend the mess we are in. Obama's strategy relies on H.L. Mencken's famous dictum, "Nobody ever went broke underestimating the intelligence of the American public." I hope Obama's echo of Mencken is all wrong, but I fear that the truer formulation is "Nobody ever went broke underestimating the intelligence of the American public, except the American public."
For starters Obama has 80% of the Jewish vote, 99% of the black vote, the union vote, the liberal press, a huge percentage of those on the dole. Then the intelligence of the American public comes in to play!
I said this here the other day: "It's now abundantly clear that going into 2012 Obama wants to blame painful spending cuts on Republican intransigence on repealing the Bush tax cuts."
Thus, I agree wholeheartedly with the lede story that TH linked. Obama himself has said that he's playing a long game.
But this isn't 1995. A lot of voters understand that we're in a pickle. But this is badly reported, even by Fox.
Even if he doesn't run in 2012, Christie has done invaluable service by making New Jersey a lab experiment on reform. So far he's won the populace over.
Events may be driven by adverse economic Holy Shit Headlines that MSM can't ignore.
The wild card is whether the Young can gain class consciousness any time soon. That'd be a game changer.
There was a time, about 3-5 years ago, when this debate about the budget was meaningful. That time has passed. From a budgetary perspective the U.S. has now crossed the Rubicon. Even optimistic budget estimates show trillion dollar deficits ad infinitum.
The U.S. will default on its debt obligations. The only question is whether the default will be explicit, like Russia, or implicit via currency devaluation. All indications are it will be the latter.
As Denninger noted, restoring fiscal balance requires cutting government spending by 70% or more. This simply is not going to happen. Outside of the three Pauls (Ron, Rand, and Paul Ryan) there is nobody in the Republican party who is serious about the issue. And as the recent budget process in the House demonstrated, the Republican leadership is completely spineless and compromised.
We're at our Dr. Strangelove moment in budgetary matters: the bomb has been released and we'll ride it down until it explodes. As Denninger says, the math doesn't lie.
The only meaningful thing that Republicans can do at this point is to push legislation granting federally recognized property rights in 401(k) accounts and pension funds to inhibit Democrats from seizing these funds. I won't hold my breath.
I was Anon 10:44, to clarify.
I'm not as pessimistic as "End of Days" Anon 10:45 ... nearly so.
The numbers are so bad, that maybe we'll be forced to fix things. But it'll take a crisis.
As I've ranted about here before, the political fault line lies between "those who get government checks" and "those who pay for them." Also between Old and Young.
The real issue is whether we can get government out of the way so that we can find our way back to 4.0% GDP growth. Obama thinks "4.0%" is something you just plug into a spreadsheet projection.
Is this a trap? Sure, I suppose so, if one believes the American public will refuse to support spending reductions in Medicare and Social Security. President Obama obviously believes he can fool all of the people, this time, and figure out some solution later. Much later. In contrast to the cynical president we have, Chris Christie says the public will support these cuts, once explained, and I think he is correct.
Perhaps we fervent worriers here better understand the budget problem than most voters, because we pay such close attention, but like Christie I believe in America and Americans: Once the problem is clearly explained the voters will support these cuts, and the so-called "trap" will instead have become an invitation to victory.
And so it begins ….
Governor Scott Walker of Wisconsin just pulled a “Christie.” In response, at the prodding of their union, so many teachers have called in sick that schools have had to be shut down. But the teachers were well enough to attend open air demonstrations. Today, Obama is calling it an “assault on unions.” Wisconsin Congressman Paul Ryan says “it’s like Cairo moved to Madison.”
Speaking of Ryan, you have to watch this clip of Ryan castigating Geithner in hearings today: How can you say you’re not adding to the debt?
I left my 11 year old's jaw agape explaining what this deficit and the exhaulted Obama mean to her and her financial future, about historical tax rates, and how I only get to keep half of what I earn so that scum can get free food, shelter, medical, etc.
If you think there is a precedent for this, I disagree. This time, you have many many unemployed, and not just the lowly worker scrapping it out for the crappy paying job. We're in a huge mess, with many cleaned out, and many who look upon this experiment with the One and realize they got chumped, they look in the mirror and see 'sucker' and the face associated with it is theirs.
The teachers who went on strike, btw, should all be fired.
I think Christie and the TEA party folks have brought a message out that's been there, and festering for some time. Stop spending our money on worthless bureacracies, education and medical for those who don't value it enough to give it to themselves, tax cheats, illegals, etc. We can't keep borrowing trillions and calling it an 'investment'.
I'm a realist, not a pessimist. It won't be the "end of days" but it will be the end of our current financial system.
Start reading with this this article from American Thinker. Note that the numbers in this article represent the types of cuts required to return to 2007 (i.e., pre-bailout) levels of debt.
It is worthwhile click through and read the referenced BIS working paper.