Making sure the recession becomes more painful, the GOP way

by charvaka Mon Aug 01, 2011 8:53 pm

For all GOP talk about wanting lower taxes, here's something they pushed hard for in the debt deal negotiations: no extension of the payroll tax holiday that Obama put in the stimulus bill. The payroll tax is one of the more regressive taxes in America -- in the sense that poor people pay more as a percentage of income than rich people do. And providing a holiday during a recession was a good idea. But the GOP wants to ensure that people feel more pain, so they insisted on an end to that tax holiday.

The other thing the GOP pushed hard for? Expiration of unemployed benefits for those hit hard by the recession.

http://www.theatlantic.com/politics/archive/2011/08/debt-deal-drama-obama-loses-jim-demint-big-winner/242873/

by Hellsangel Mon Aug 01, 2011 9:12 pm

Looks like Obama lost both in principle now and pragmatically. The people will want to put a face to the economic gloom and what better face than the President. All the center-left and center-right voters who voted for Obama will probably stay home. And he will lose the hardest hit states like Michigan and Ohio, costing him the election.

by charvaka Mon Aug 01, 2011 11:17 pm

Hellsangel wrote:Looks like Obama lost both in principle now and pragmatically. The people will want to put a face to the economic gloom and what better face than the President. All the center-left and center-right voters who voted for Obama will probably stay home. And he will lose the hardest hit states like Michigan and Ohio, costing him the election.

This is the likely scenario now. It will take an almost miraculous recovery in the job market now to revive his chances of reelection. Even if that happens, I will find it difficult to support him as unreservedly as I did last time round.

by charvaka Mon Aug 01, 2011 11:18 pm

charvaka wrote:For all GOP talk about wanting lower taxes, here's something they pushed hard for in the debt deal negotiations: no extension of the payroll tax holiday that Obama put in the stimulus bill. The payroll tax is one of the more regressive taxes in America -- in the sense that poor people pay more as a percentage of income than rich people do. And providing a holiday during a recession was a good idea. But the GOP wants to ensure that people feel more pain, so they insisted on an end to that tax holiday.

The other thing the GOP pushed hard for? Expiration of unemployed benefits for those hit hard by the recession.

http://www.theatlantic.com/politics/archive/2011/08/debt-deal-drama-obama-loses-jim-demint-big-winner/242873/

I should restate that in the Newspeak of the GOP: The payroll tax is one of the most regressive taxes in America -- in the sense that ~~poor people~~ the job-takers pay more as a percentage of income than ~~rich people~~ the job-creators do.

by Marathadi-Saamiyaar Mon Aug 01, 2011 11:54 pm

I read some details about the debt deal. Knowing the mindset of the republicans, the cuts will be likely borne mostly by the have-nots.

have to see more details. But don't like it at all...not at all....at this point.

by SomeProfile Tue Aug 02, 2011 1:40 am

charvaka wrote:Even if that happens, I will find it difficult to support him as unreservedly as I did last time round.

I am beginning to think that Hillary Clinton might have actually made a better president in these tough times. Can anybody imagine her capitulating to the Republicans as often as Obama has? I can't. In fact, she would have taken the fight to them, and even played the woman and mom card, if it really became necessary.

by charvaka Tue Aug 02, 2011 1:44 am

SomeProfile wrote:I am beginning to think that Hillary Clinton might have actually made a better president in these tough times. Can anybody imagine her capitulating to the Republicans as often as Obama has? I can't. In fact, she would have taken the fight to them, and even played the woman and mom card, if it really became necessary.

Yeah, I can't imagine Hillary capitulating that easily. She would have had a harder time winning in 2008 than Obama did, but given we know in hindsight how big Obama's victory margin was, it is a tempting thought to wonder if Hillary would have been a better choice after all.

On the flip side, though, we wouldn't have gotten healthcare reform with Hillary. So on balance I guess Obama is OK.

by Marathadi-Saamiyaar Tue Aug 02, 2011 1:54 am

Look for the republicans to go after the health care - at least seriously try. The congress is the one that decides on how much to cut in what and who gets to spend. If you remove the interest on debt and military expenditures, you have 40 cents on the dollar. Naturally, this is not sufficient and the biggest cuts are going to be in medicare, medicaid, disability, aid to states for schools, etc..which all come under Health and Human Services. then other cuts are possible only in commerce and education which is not much. Expect a drastic reduction to the states, which in turn will be in a disastrous situation forced to raise state and county/street taxes, reduced school funding, services, etc..

Expect a train wreck all the way to town halls.

by charvaka Tue Aug 02, 2011 2:05 am

Marathadi-Saamiyaar wrote:Look for the republicans to go after the health care - at least seriously try. The congress is the one that decides on how much to cut in what and who gets to spend. If you remove the interest on debt and military expenditures, you have 40 cents on the dollar. Naturally, this is not sufficient and the biggest cuts are going to be in medicare, medicaid, disability, aid to states for schools, etc..which all come under Health and Human Services. then other cuts are possible only in commerce and education which is not much. Expect a drastic reduction to the states, which in turn will be in a disastrous situation forced to raise state and county/street taxes, reduced school funding, services, etc..

Expect a train wreck all the way to town halls.

This is one reason I didn't want the Dems to sign up for this bill. The last thing they should do is dirty their hands with a vote that results in Medicare being cut.

I think the US is making a big deal of its debt unnecessarily. Sure, it has 14 trillion in debt. But about half of that is to itself -- the Social Security trust fund. And overseas investments that US individuals and companies have add up to a few trillion. Net-net, US debt to the world is a small percentage of its GDP. With the US's low cost of capital, it would be foolish not to maintain 10-20% of GDP level of net indebtedness. (Just like large corporations and even the ~~super-rich~~ super-job-creators seek to take on debt to maximize ROI through an appropriate amount of leverage.)

It is possible to balance the budget through a combination of: eliminating Bush tax cuts above $250k income, eliminating all manner of corporate welfare, winding down the wars in Iraq and Afghanistan (and Libya) and making really marginal adjustments in domestic programs. Instead, the Tea Party that has the GOP's balls in a vice-grip wants to cut social security, medicare, Pell grants and food-stamps for the ~~poor~~ job-takers, and give more tax breaks to the ~~rich~~ job-creators.

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