Did you take all of Barack Obama’s promises to seek a “balanced approach” to deficit reduction during the campaign seriously? Did you buy it when he told you he wanted $2 or $3 of spending cuts for every dollar of tax increases?
If so, you must be terribly surprised to learn that the President, once safely re-elected, began calling for a whopping $1.6 trillion in tax increases. That’s literally double the tax increases he demanded during the last debt ceiling showdown. (For those who don’t understand the federal budgeting process, the “debt ceiling” is a series of thin glass panes America shatters without losing much velocity as it hurtles toward the “fiscal cliff.” You never know which will be the last debt ceiling you blast through before you fly off the cliff into total national collapse. That’s what makes the whole ride so exciting!)
The President’s post-election demands almost exactly invert his campaign rhetoric: he now wants nearly $3 of new taxes for every dollar in spending cuts. Of course, most of the spending cuts will never happen anyway. The figures Obama bandies about are stretched out over 10 years, eight of which would occur beyond the power of the current Congress. On medieval sea charts, that was the part of the map marked with “here there be dragons,” or a little drawing of a waterfall at the edge of the flat Earth.
But it gets even worse, because Obama’s plan won’t collect the fresh revenue it promises, either. Tax increases never do. The economy will plunge from the past four years of malaise into outright recession, and the people Obama targets most vigorously for tax increases will find ways to avoid them. That’s how it always works.
The result will be far worse deficits than anything Obama projects, which will in turn be used as cudgels to beat even more tax revenue out of the American people. Keep your eye on that $200,000 threshold for “millionaires” in Democrat rhetoric – it’s going to start coming down, and fast. You’ll be amazed how little a “millionaire” makes per year by 2016. There just aren’t enough “rich” people to produce the kind of money it takes to close Obama’s titanic deficits; it’s the ultimate practical failure of “progressive taxation” ideology. The big money is right where it as always been: the vast “middle class.” The solution will be to redefine “rich.” Eventually it will mean “anyone who doesn’t qualify for food stamps.”
These “balanced approach” kabuki performances distract us from the essential truth that the national debt is a spending problem, not a revenue problem. Every measure that obscures this fact is worse than useless – it’s actively harmful. Obama wants to siphon another $160 billion a year out of productive Americans; the budget deficit in October alone was $120 billion.
And he’s still not talking about actually reducing the national debt. He’s talking about modestly reducing the rate of its growth. The federal deficit for the just-concluded fiscal year 2012 was $1.089 trillion. Why are we fooling around with “deficit reduction” plans worth less than a quarter of that amount? If Obama really thinks we can tax our way to solvency and prosperity, why isn’t he proposing an immediate $1 trillion in tax increases? There really was a realistic plan on the table for delivering a balanced budget in 2011. It was called the Cut, Cap, and Balance Act, and it came within a half-dozen votes of passing the Senate. What we actually got, the Budget Control Act of 2011, was useless crap that wasted another year of America’s time, and bids to weaken our national defense with its sequestration cuts. Why don’t we go back to talking about the plan that actually would have worked?
Obama, and his campaign cheerleader Bill Clinton, spent much of the campaign assuring us that prosperity would flow if we just returned to Clinton’s tax rates, by allowing the Bush “tax cuts” to expire. That was always nonsense, especially considering that neither of them ever proposed returning to Clinton’s spending levels. But now Obama doesn’t even pretend he wants to go back to Clinton tax levels – he demands more.
That’s the one useful thing Republicans should take from Obama’s press conference today: claim strength, bid high, and negotiate hard. In practical terms, the American public just voted for the same situation that has existed in government since 2008. “Mandates” are claimed, not given. Let’s claim one for fiscal sanity, and remind voters of all the things Obama said during the campaign, but now wants them to forget.