Wednesday, July 06, 2011

Don't take the Deal!

David Brooks, Tyler, & Megan all implore the Republicans to "take the deal", meaning to accept some tax increases in exchange for "trillions in spending cuts" as conditions for raising the debt ceiling.

I disagree.

But, Angus, those are smart people, smarter than you, what is your problem?

Thanks for asking.

Let's ignore the fact that our economy is still in a big mess with high unemployment and underwater homeowners and just look at the terms of the deal.

The "cuts" are over a 10 year window. People, we have seen this movie before. Presidents are elected for 4 years, House members for 2 years. Current decisions are non-binding on future politicians. The cuts are a joke.

The tax increases, I'll wager, will NOT be coming over a 10 year window.

All current politicians can credibly do is cut NOW. So Republicans, please: cut or get off the pot.

It will never happen, but what we actually should do is (1) raise the debt ceiling with no strings attached. (2) Cut, not raise taxes, (3) pray that our credit holds out long enough for the economy to get healthy. (4) when either the economy gets healthy or our credit runs out, then cut spending down to size.


Anonymous said...

"underwater homeowners" is an oxymoron. What these people own is an obligation to make payments to the holder of the mortgage. The home belongs to the holder of the mortgage. They get to live in the home, but they certainly don't own it. And most never will.

gabe said...

David Brooks never met a war or spending increase he wasn't in favor of...why would people value his opinion?

I'd be in favor of a debt default. It is the only way we can be reasonably confident that we have a balanced budget going forward.
Stealing from the kids is not responsible budgeting, doesn't matter what rationalization is fashionable to justify it.

Dave said...

I don't think the economy will ever recover in your scenario. Between the massive debt and the massive government spending, it's no surprise there is little real growth from productivity gains and innovation.

The last time total gov't spending was this high we were embroiled in WW II. The difference is we demobilized then.

Anonymous said...

so your idea is to pray? a PhD economist says we should pray? thats all you got?