Curmudgeon's Corner

They Live to Fight Another Day...Over Our Money

Posted by Al Campbell on Jan. 2, 2013

Taxes, Political, Economy

Considering the hand that was dealt, the Republicans came out of this dust-up in better position than expected.  The Bush tax rates were largely codified permanently and the Alternative Minimum Tax (AMT) was made permanent without the need to have it annually updated for inflation.  The AMT will now be automatically updated.

The vaunted ‘fiscal cliff’ is still out there but that won’t be dealt with until mid-February, if then.  It lives to make more shenanigans possible by the ruling class as it works to do away with fiscal cliffs.  We have some very serious cuts that need to be made, especially in the Defense Department.  That must be balanced against the still very dangerous world in which we live.  We have some social welfare programs, not the least of which is Social Security, that need to be made self-sustaining either through greater contributions, lesser benefits or a combination.  That has always been a ‘third rail’ for politicians.

The one ratio that emerged from all this that has stuck in my mind is this – 41:1.  That represents the amount of tax increases passed versus the amount of debt that was affected.  On that count, the Democrats cleaned up and they have gained a new weapon to use against the Republicans who voted for the deal.

As these things go in Washington, there is a mish-mash of things in the bill.  That enables everyone to make claims about why they did or didn’t vote for a bill.  Sen. Ron Johnson was talking about the milk cost increase that was averted as among the things he wanted to get done.  Whomever he faces the next time, if there is a next time, will certainly make use of that against him.  Rep. Ryan will have similar things with which to contend as the result of having voted in favor.

The last count I heard indicated there were some 96 different pieces that were cobbled together in the bill that passed.  That was more than sufficient to get the votes required especially from the Republicans who were convinced they could support this bill in spite of any positions taken to the contrary.

There remains a group of totally dissatisfied people who are both Senate and House members.  These were/are the people who were/are much more rigid in their views of what was/is and what wasn’t/isn’t acceptable.

A simple fact remains throughout all this commotion:  we are deeply in debt and that has to change if we want to avoid becoming so indebted that we’ll not be able to borrow any more money because we won’t have an economy that will make it possible for us to pay back that which we have already borrowed.  It appears, unless there are major changes in position, that President Obama has very large plans for his second term and the bulk of those plans entail spending continuation and/or increases that have proved unsustainable over the long haul.