As if no one is shocked. Below is a portion of a daily Economist's brief I get...
What a Shock
The super committee has indicated that they expect to fail and there is not a person on the planet that is
surprised by this announcement. The vast majority of analysts had indicated that they expected failure the
moment the group was created from among the most ideologically rigid members of Congress. This was not a
group of moderates willing to try to find common ground but twelve of the most rock ribbed Democrats and
Republicans the leadership of Congress could find. In some respects this was a wise play as a group of
moderates would not have been able to bring the more extreme elements of their respective parties along with
any decision they made. If there was even the faintest hint of success it would have to come from a
compromise by the most unlikely to make such a deal. It was a gamble that did not pay off from the standpoint
of success but it works politically.
The two sides have essentially used the super committee process to position themselves for the coming
election. The lines are drawn more firmly than ever and now the public really will have the last say – sort of.
The GOP has made it clear that revenue adjustment is off the table unless there are extreme concessions from
the Democrats and the Democrats have made it just as clear that no such concessions will be forthcoming
without GOP willingness to bend on taxes.
Both sides are under the control of their most ideological elements and the issue of debt and deficit is not at
the top of their list. To the GOP members who have fought taxation the real issue is that they want a much
smaller government and intend to starve it to size. The Democrats who insist on taxation seem more interested
in going after the wealthy on principle than on a tax system that really attacks the deficit. Even if the
wealthiest paid rates of 50% the deficit would shrink by only 10%.
Analysis:
There are some who will assert that budget cuts will now fall on the most sensitive of programs –
Social Security, Medicare, Medicaid and the military. The supposed incentive for the group to reach a deal is
that nobody wanted these automatic cuts but the chances of these ever being enacted is slim to none. The
cuts do not take effect until 2013 and that will be after a new Congress will have been put in place by the
2012 election. No prior Congress can hold a future Congress to much of anything and the next group will
simply open the issue once again and eliminate the automatic provision as they take up the deficit anew. This
has been the pattern many times in the past and will be the tactic used this time as well. This is what
essentially throws the issue in the laps of the electorate. The two sides are offering radical differences as far
as the role of government and the voter will be choosing. If one wants very low taxes and minimal
government the GOP will be the choice. If one wants taxes increased as part of the deficit solution and wants
to see government stay engaged in most of its current activity the Democrats will be offering that choice.
What a Shock
The super committee has indicated that they expect to fail and there is not a person on the planet that is
surprised by this announcement. The vast majority of analysts had indicated that they expected failure the
moment the group was created from among the most ideologically rigid members of Congress. This was not a
group of moderates willing to try to find common ground but twelve of the most rock ribbed Democrats and
Republicans the leadership of Congress could find. In some respects this was a wise play as a group of
moderates would not have been able to bring the more extreme elements of their respective parties along with
any decision they made. If there was even the faintest hint of success it would have to come from a
compromise by the most unlikely to make such a deal. It was a gamble that did not pay off from the standpoint
of success but it works politically.
The two sides have essentially used the super committee process to position themselves for the coming
election. The lines are drawn more firmly than ever and now the public really will have the last say – sort of.
The GOP has made it clear that revenue adjustment is off the table unless there are extreme concessions from
the Democrats and the Democrats have made it just as clear that no such concessions will be forthcoming
without GOP willingness to bend on taxes.
Both sides are under the control of their most ideological elements and the issue of debt and deficit is not at
the top of their list. To the GOP members who have fought taxation the real issue is that they want a much
smaller government and intend to starve it to size. The Democrats who insist on taxation seem more interested
in going after the wealthy on principle than on a tax system that really attacks the deficit. Even if the
wealthiest paid rates of 50% the deficit would shrink by only 10%.
Analysis:
There are some who will assert that budget cuts will now fall on the most sensitive of programs –
Social Security, Medicare, Medicaid and the military. The supposed incentive for the group to reach a deal is
that nobody wanted these automatic cuts but the chances of these ever being enacted is slim to none. The
cuts do not take effect until 2013 and that will be after a new Congress will have been put in place by the
2012 election. No prior Congress can hold a future Congress to much of anything and the next group will
simply open the issue once again and eliminate the automatic provision as they take up the deficit anew. This
has been the pattern many times in the past and will be the tactic used this time as well. This is what
essentially throws the issue in the laps of the electorate. The two sides are offering radical differences as far
as the role of government and the voter will be choosing. If one wants very low taxes and minimal
government the GOP will be the choice. If one wants taxes increased as part of the deficit solution and wants
to see government stay engaged in most of its current activity the Democrats will be offering that choice.
Fixed it
