Capitalizing on Collapse
News sources are leading us to believe that the debt “super committee” will not reach a consensus to cut $1.2 trillion from our deficit over the next ten years. Of course, even cutting $1.2 trillion (over ten years) would be meaningless. Our 2011 deficit (for one year) was $1.3 trillion. Cutting $1.2 trillion over ten years may be a start, but it’s a very slow start.
Here’s a link to the best article that I’ve read about all this. It’s called “Capitalizing on Collapse” and it was written by Thomas B. Edsall. Here were his key ideas (as you can see through the link, some of these are direct quotes and others are slight paraphrases…but they are all his work):
- Both sides may have incentive to see these talks fail. The Republicans probably have the stronger incentive.
- The Democrats would like to see the Bush tax cuts terminate at the end of 2012. There are estimates that this could result in $3.8 trillion more tax revenue and this may allow politicians to postpone dealing with Social Security and Medicare for some time. This could be the Democrats’ incentive.
- The Republicans have a high-risk, high-reward incentive. Intrade (a futures market that allows us to gauge sentiment) favors the Republicans to take over the Senate and retain the House in 2012. A majority of Americans currently believe that the next President will also be Republican. In other words, the Republicans believe that there is a possibility that they could gain complete power.
- If the Republicans control both the legislative and executive branch, they can change the tax code and also change the entitlement programs in exactly the way that they want. They believe that we are headed in that direction and that is their incentive to see the committee fail.
- This could be the last chance for Republicans to dominate due to demographic trends. There is growth in the Democratic base – there is growth in the minority electorate and in increasing number of unmarried, Democratic-leaning voters (especially single women).
- The economic policy gulf between the parties is so wide that it seems impossible for Democrats and Republicans to split the difference.
- The anti-tax, anti-government ideology of the right cannot be legitimately reconciled with the pro-government, high-tax commitment of the left and vice versa. On top of that, these competing ideologies have acquired a moral dimension that makes ordinary political give-and-take intolerable.
- Notions of unilateral victory, whether through Republican domination of Washington or through the expiration of the Bush tax cuts, become increasingly attractive, no matter how fanciful, if the alternative is engaging in the processes of honest bargaining, accommodation, negotiation and compromise.
Ultimately, I think that Edsall is saying what we all believe: that this is not about doing what is right; rather this is about what is good for my particular party. Preservation of power (or regaining power) is especially significant when we have career politicians.
I think that most Republicans feel like they have no room to compromise on taxes due to the pledge that most of them have signed with Grover Norquist. You should spend a few minutes watching the 60 Minutes story (from last night) on this topic. Here’s the link. If a pledge-signer votes to raise taxes, they’re likely to have a well-funded opponent in their next Republican primary.
The only thought that I disagree with is Edsall’s argument that demographics are turning against the Republicans and 2012 is the last chance for them to gain control. Ultimately, both parties recognize that the key to getting elected is to win the middle. Each side has their share of crazies who believe that one side is good and the other side is evil. The question is how you win the middle (people like me who believe that both sides are evil).
If we can’t figure out a way to meet in the middle (especially over something as small as $1.2 trillion over ten years), we should all be discouraged. The possibility that one side is going to ultimately force their way on the other is dangerous. Neither side is correct on all issues. (It’s more likely that they’re both wrong on most issues.) I continue to believe that our country is slowly moving in the wrong direction – seeing each other as the enemy rather than recognizing that we’re competing as a nation against other countries that want to pass us in economic and political importance.
Have a great Thanksgiving.
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