The “Dead Shark” solution
The current state of the “fiscal cliff” drama was summed up by the identically-worded statements released by both President Obama and House Speaker John Boehner, following their first face-to-face meeting in weeks: “This afternoon, the President and Speaker Boehner met at the White House to discuss efforts to resolve the fiscal cliff. We’re not reading out details of the conversation, but the lines of communication remain open.”
There’s no great public loss to keepng the details of this meeting secret, because President Obama really isn’t “negotiating” with the Republicans anyway. The common media practice of characterizing the Fiscal Cliffhanger as a “negotiation” is mistaken. It’s all about Obama cranking up his campaign machinery to intimidate Republicans into caving on tax hikes, which will do absolutely nothing to address the deficit, but would return the GOP to its traditional subordinate role of “tax collector for the welfare state.”
To that end, the President jetted off to Detroit – a city so comprehensively destroyed by decades of Democrat governance that there is serious talk of dissolving it – to dump off some more class-warfare rhetoric. Inconveniently, at the same moment, one of his lavishly-subsidized green energy losers, battery maker A123 Systems, was being purchased by the Chinese. Behold the wonders of Obamanomics: fleecing American taxpayers to stuff money into the pockets of Obama contributors so they can build a company for the Chinese to buy.
You would think the American public would take some notice of what Barack Obama actually does with every dollar he gets his hands on, but while they keep telling pollsters they favor a “balanced approach” to serious deficit reduction and spending cuts, it’s increasingly clear this is an example of poll respondents delivering the “expected,” responsible-sounding answers to questions they don’t really take seriously. Their expectations are easily gamed, using the old tactic of grabbing new taxes immediately, while making vague promises of spending restraint in the never-never “out years.” A vague pretense of fiscal responsiblity is good enough to keep Americans comfortable with the unlimited-debt Big Government status quo. Even when it became comically obvious that Obama’s endless talk of a “balanced approach” was empty campaign rhetoric he discarded within moments of delivering his victory speech, most of his voters didn’t grow upset.
So, while the Republican leadership is working up counter-proposals, and dealing with the resulting intra-party pressure, in a doomed quest to convince the press to anoint them “More Serious About Deficit Reduction,” Obama is off setting up telemarketing sweat shops to crank up the pressure for fiscal cliff capitulation. The GOP’s best hope for success would be using a little fiscal-cliff judo to turn all of this carefully cultivated public outrage over the impending middle class tax increases – thanks to the expiration of tax rates that Democrats most certainly did not describe as vital nourishment for the middle class when President George Bush implemented them – against the Democrats, by making tough counter-offers that Obama will never accept. Set a very high price for Obama’s prized soak-the-rich tax rates, then ask why he won’t agree, in order to save the Sainted Middle Class from Taxmageddon.
For example, why not propose the “Dead Shark” solution, which I’ve named for the way a shark dies when it stops swimming?
1. Obama gets his treasured tax rate increases, but only on actual millionaires, not the “top 2 percent.” Among other things, that group contains a lot of small businesses. Raising taxes on them during a time of high unemployment should be a non-starter. Quote Obama’s past pronouncements to this effect, if necessary. The remaining revenue Obama wants to raise can be obtained by reforming tax deductions. Once again, quote Obama’s past endorsements of this approach as needed.
2. In return, the debt ceiling stays where it is, forever. To allow time for the necessary adjustments to the federal budget, we could allow the national debt to finish rounding itself up to an even $17 trillion over the coming year, but then it never rises again. No more deficits, period.
The President often speaks of making a “down payment” on fiscal responsibility, portraying his proposed tax hikes as such a down payment. That’s nonsense. His tax increases would cover only five to seven percent of the deficit, and we have absolutley no reason to believe he wouldn’t immediately spend the new money, rather than using it for deficit reduction. In fact, by the reckoning of Senator Jeff Sessions (R-AL) of the Budget Committee, Obama’s $1.6 trillion tax hike demand has about a trillion dollars of new spending built right in. The President isn’t even bothering with the usual Washington shell game of “tax increases now for spending cuts someday.” He’s pushing one shell around on the table, and you can see through the cracks that it does not contain a pea.
We don’t need “down payments” on deficit reduction; we need a down payment on paying down the national debt. Even at its current level, it is extremely dangerous. Do you remember all those credit rating companies who have been warning about downgrades to America’s sovereign debt in the coming years? None of them said they would be satisfied with a tiny pocket-change reduction in the rate of growth for our debt. We’re already paying hundreds of billions of dollars a year – far more than Obama wants to take in with his tax hikes – to finance that debt. Cutting the size of the national debt back to the amount Bill Clinton inherited would do a lot more for our federal balance sheet than returning taxes on certain politically unfavorable groups to Clinton levels. Conversely, we are speeding toward the day when debt service consumes every dollar of federal spending. That day will arrive during the early working years of Obama’s imaginary pet dependent, “Julia,” making all of the wonderful programs he promised to safeguard Julia’s future into grim jokes. There literally will not be any money for any of those programs.
If the government is supposed to be serious about fiscal sanity, it needs to eliminate the deficit, not hatch long-term plans to make it a little smaller. Ten-year plans are silly anyway; no restraint promised by this Congress will bind the next one, so anything that’s supposed to happen more than two years in the future will never happen. How many times must we fall for that hoary old dodge before we learn our lesson?
On the other hand, if this Congress freezes the debt ceiling forever, the net effect would be something on the order of $4 trillion to $5 trillion in immediate spending cuts. That’s because automatic spending increases are built into Washington’s fradulent budgeting schemes (to the extend that it bothers to pretend the federal government has a budget at all.) If the government can’t borrow any more money, it will be necessary to either cut spending, or get serious with the American people about how much all of their taxes need to rise, right now, in order to finance Obama-sized government. No more vague promises, no more taxation without representation of the next generation through reckless deficit spending.
During the campaign, Obama grew fond of saying that budgets are a way of expressing our priorities. He’s right, but of course it’s an absurd joke when he says it, because he’s not talking about “budgeting” anything. Everybody gets their lollipops; every Democrat constituency gets its payoff. Nobody, from Food Stamp Nation up to Obama’s favorite multi-millionaire solar panel entrepreneurs, has to make do without anything. The bills get handed to the President’s political enemies, or tossed onto the national credit card for the kids to worry about when they grow up. The Democrats briefly flirted with a “pay as you go” rule in the early Obama years, in which new spending had to be offset by cuts elsewhere, but the effect was similar to a pack of vampires climbing into a jacuzzi filled with holy water. Maybe this would be a good time for the GOP to dig up some of the Democrats’ lofty promises for those long-forgotten “pay-go” rules, too.
If we lock down the debt ceiling, we really will get an honest-to-God budget out of Washington… for the first time in a very long time, much longer than the four years in which Senate Democrats haven’t even bothered with the pretense of crafting a budget. Every new lollipop will have to come out of someone else’s hands. No more absurd fantasies about “free stuff.” The public will finally understand that none of it is “free,” and they’ll have to decide if they want to spend their days fighting for table scraps at the feet of Big Government. Just wait until the Democrats have to list precisely what they’re going to cut, in order to push through the next expansion of unemployment benefits.
And just as a little incentive, let’s throw in a rule that in any year when Congress fails to pass a budget, no sitting member of either house shall be eligible for re-election. That ought to clear out some of the dead wood. Fiscal irresponsibility becomes much less attractive when it’s a political suicide pact.
The potential problem with the Dead Shark Solution is that a future Congress could always undo the bargain by voting to remove the debt ceiling. That’s really an extension of the great problem with our Republic: as Ben Franklin feared, we may have become a people no longer capable of keeping it. With proper Constitutional restraints long ago dissolved, responsible government is a matter of public demand, and if the public doesnt’ demand it, they won’t get it. But there’s no way Obama would take the Dead Shark deal anyway. The point is to make him refuse it, and explain why.