Rumors: “The Deal”

I hear that a “deal” on the debt ceiling and sundry other unimportant economic matters may be close at hand. It appears to be a triumph of political bargaining over common sense, decency, and anything remotely connected with moral fortitude.

If what I hear is correct – and these things shift all the time – the new deal is along the lines I reported yesterday. The sticking point has been revenues all along. The extremists want no revenue increases. This is laughable. At the moment our tax take from income taxes is about 6% of GDP. It was 18% in the heyday of Reagan’s regime. Any plan. Absolutely any plan that is a serious attempt to correct our fiscal problems must – must – include a revenue increase. That means more taxes. The deal thus focuses on ways to raise taxes without raising taxes. It relies on magic.

Since much of modern business and economic theory also relies on magic there are plenty of people who believe this trick can be pulled off and that no one will notice.

Good luck.

I prefer the old fashioned method: honesty. Explain that if we want to keep our entitlement programs – they are nearly universally approved by voters – then we actually have to pay for them. I realize that this puts politicians in a difficult position, they have, after al,l used the Reagan strategy of using debt to pay for the goodies, but eventually that ruse ends and we have to grow up.

Anyway: the deal apparently includes tax reform which is this year’s magical potion. Whether Congress actually delivers that reform is another matter. I bet they come through on the spending cuts though. Not the defense ones of course. Defense is important. No. They will come through on the cuts that the elderly, the poor, the sick, and the children will feel. After all we have to be tough in these days of crisis.

All this, naturally in these days of comic book politics, misses the point entirely. We need more stimulus. No cuts.

But no one seems to care anymore. That’s modern America for you. Heartless and soulless too.

How does that poem go?

“… give me your tired, your poor, your huddles masses yearning to breathe free …”

So we can ignore them.

Nice.