Just Do It

Go ahead.  Do it. Go off the cliff.

That is almost the unanimous view of my conservative friends, despite the warning that it may trigger a new recession.

Why?

3 reasons.

First, there is almost a complete lack of faith in John Boehner's ability to negotiate with Barack Obama.  Spooked by the election results, he immediately signaled his willingness to roll over on taxes and several other Republicans have chimed in.  Grover Norquist is being treated as the Grand Wizard of the KKK.  Even Bill Kristol has gone wobbly.  And what will the results be?  Almost inconsequential for the budget.  Letting ALL of the Bush tax cuts expire runs the government for about 8 days.  The Democrats have proposed NO meaningful adjustments to entitlements.  Without that, we are getting nothing for our concessions.  Boehner simply is not up to the task.

Second, any tax increase will only be the start.  To understand this, you need to apply the addiction model to government.  Government is addicted to spending.  Addicts will say or do ANYTHING to get their next fix.  They always promise that they will quit tomorrow.  It is no different with government.  Obama will promise some token cuts to go into effect at some future date, or will promise to slow increases....if he can have his fix today.  He will pocket the money, but the cuts will never come or will be reversed out or will be managed by some budgetary accounting gimmicry.  And then they'll come back for another fix.  They always do.  They key to understanding this concept was Obama's assertions during the debates.  For years, he carped about the wars Bush waged that weren't paid for.  Then, in the debates he promptly asserted that half of the money "saved" (that we didn't have in the first place) from winding down the wars would  be used to "invest" in much -needed infrastructure.  Huh?  Setting aside the concept that the "stimulus" was supposed to be used for that purpose, how do we reallocate money we didn't have in the first place for other spending?

Third, assuming that we as a society have decided that Big Government is what we want, then we ALL have to share in the pain.  The "rich" and the middle class and the lower class.  We ALL need to share in this and feed Big Government because there simply aren't enough rich people to satiate the beast.  It is easy to tax YOU to pay for MY government goodies.  But if we ALL have to pay, perhaps we will make different choices at the ballot box.   Everyone needs to feel what it feels like to have government taking more of what they earn.  Then, if we are still happy with this state of affairs, so be it.  But we ALL need a dog in this fight.

In the final analysis, this should be an OK deal.  Obama would get most of what he really wants---higher tax rates and big reductions in the military.  The Republicans would get reductions in social spending.  What's not to like about this deal?

Unless we choose the fiscal cliff, we will get immediate tax increases and illusory cuts.

We might as well hold hands and jump together.