Tuesday, December 4, 2012

Last Call

And David Brooks loves him some middle class suffering, because he's basically evil and it builds character, or something.

So Republicans have to realize that they are going to cave on tax rates. The only question is what they get in return. What they should demand is this: That the year 2013 will be spent putting together a pro-growth tax and entitlement reform package that will put this country on a sound financial footing through 2040. 

Republicans should go to the White House and say they are willing to see top tax rates go up to 36 percent or 37 percent and they are willing to forgo a debt-ceiling fight for this year. 

This is a big political concession, but it’s not much of an economic one. President Obama needs rate increases to show the liberals he has won a “victory,” but the fact is that raising revenue by raising rates is not that much worse for the economy than raising revenue by closing loopholes, which Republicans have already conceded. 

In return, Republicans should also ask for some medium-size entitlement cuts as part of the fiscal cliff down payment. These could fit within the framework Speaker John Boehner sketched out Monday afternoon: chaining Social Security cost-of-living increases to price inflation and increasing the Medicare Part B premium to 35 percent of costs. 

But the big demand would be this: That on March 15, 2013, both parties would introduce leader-endorsed tax and entitlement reform bills in Congress that would bring the debt down to 60 percent of G.D.P. by 2024 and 40 percent by 2037, as scored by the Congressional Budget Office. Those bills would work their way through the normal legislative process, as the Constitution intended. If a Grand Bargain is not reached by Dec. 15, 2013, then there would be automatic defense and entitlement cuts and automatic tax increases. 

In other words, Bobo wants to make sure the middle class in America is destroyed, long after he's dead, and that it never rises again.

To get debt down to the levels we're not talking about trillions in spending cuts, we're talking about tens of trillions in spending cuts.  40 percent of GDP would be $6 trillion, from the $16 trillion we're at now, and it require not just balancing the budget and eliminating deficits, it means running up a surplus big enough to pay off the debt through either massive tax increases or massive spending cuts, or both.  At the very least, it would mean balanced budgets until at such time the GDP magically grew large enough so that $16 trillion WAS 40% of the GDP in 25 years.  Raise your hand if you think America's GDP is going to triple or so in 25 years with huge cuts on the menu in basic education and infrastructure.

Sure it will.  Laffer Curve!  

Bobo's just evil, and it sure doesn't matter to him if the middle class burns.  He's a rich snothead with a cushy columnist job.

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