Not that I suppose it doesn't really matter all that much to Barry or any of his fellow Democrats, but there's a new government study that has recently come out that says the combination of allowing of the Bush-era tax cuts to expire and the round of automatic spending cuts that are scheduled to take effect, would a rather significant event that would be very likely throw our economy into yet another recession. The report comes to us from the Congressional Budget Office (CBO) and states very clearly that the economy would shrink by 1.3 percent in the first half of next year if the government is allowed to fall off this so-called "fiscal cliff" on Jan. 1. The cliff is what experts call the combination of higher tax rates and more than $100 billion in automatic cuts to the Pentagon and domestic agencies. But since that would come safely after the next election, it's all of very little consequence to Barry, whether he wins or he loses.
And that's a point that Republican leaders have hammered at again and again in an effort to move Barry "Almighty" into being part of some semblance of responsible negotiations regarding the keeping of the Bush tax cuts in place. “It looks like there will not be a vote until after the election, but I can’t say that for certain — but it certainly looks like that,” predicted Senator Jeff Sessions. “That’s not healthy because we need certainty in our tax rate. There’s far too much uncertainty in our financial condition in America today.” And last week, House Speaker John Boehner called on Congress and the White House to work out some sort of a long-term deficit deal and threatened not to raise the nation’s debt ceiling next year unless a greater amount of spending cuts is enacted. Nothing against Mr. Boehner, but I've heard tough talk from him before only to be disappointed later by his actions.
And while Senate Minority Leader Mitch McConnell has accurately stated on more than one occasion that Barry is not behaving like an "adult" when it comes to negotiations to stave off the fiscal disaster, I don't have much confidence in Mr. McConnell either. Who has also said that without Barry actually expending the requisite energy and taking some sort of action, nothing can be done regarding the debt. "Look, without presidential leadership, nothing is, can be accomplished," he said. "We didn't have presidential leadership last year. It's pretty clear the president's not going to lead on this any time soon." He went on to say, "We don't control the entire government." Adding, "We control the House of Representatives only. We'd like to do something about the nation's biggest problem — spending and debt, which is, of course, the reason for this economic melees and this high unemployment — and whenever the president is willing to engage, we're ready to go."
And then we have "Dingy Harry" Reid, Nevada Democrat, acting ever his irresponsible self, signaling as recent as Tuesday that he intends to allow the automatic spending cuts called for in last year’s debt deal to go into effect, culling billions of dollars from defense and domestic spending, unless Republicans agree to allow taxes to increase on at least some taxpayers. “If Republicans want to walk away from the bipartisan spending cuts agreed to last August, they will have to work with Democrats to replace them with a balanced deficit-reduction package that asks millionaires to pay their fair share,” "Dingy" said. Republicans remain adamant that the lower income-and investment-tax rates passed in 2001 and 2003 under President Bush, and extended in 2010 under Barry, must be extended again. “No economy can sustain such a hit without being hurled into recession,” said Senator Orrin Hatch, the ranking Republican on the Senate Finance Committee.
The CBO's report states quite clearly that any immediate tax increases and spending cuts would "represent an additional drag on the weak economic expansion." CBO is the respected, and supposedly, nonpartisan agency of Congress that produces economic analysis and estimates of the cost of legislation. “Given the pattern of past recessions as identified by the National Bureau of Economic Research, such a contraction in output in the first half of 2013 would probably be judged to be a recession,” the report states. A recession is technically defined as two economic quarters of negative economic growth. If Congress and the White House turn off all the automatic cuts and tax increase, growth would rise to 4.4 percent, CBO predicted. The CBO projections appear to go farther in stating the economic risks of lawmakers failing to act than other policymakers have gone.
Because of the level of gridlock that taken place over the course of the last year and a half, and that has become the rule in Washington, the source of which is the Democrats' "my way or the highway" mentality, lawmakers have put off decisions on cutting spending or raising taxes, leaving everything to bite at the beginning of 2013. The list of expiring laws reads like a taxpayer’s worst nightmare: The alternative minimum tax would bite ever deeper, last year’s 2-percentage-point payroll-tax cut would disappear, business-investing tax breaks would end, and almost all of the 2001 and 2003 tax cuts would expire. Meanwhile, some tax increases from Barry’s healthcare debacle are slated to begin biting in January. On the other side of the ledger, existing laws would lead to a drop in unemployment benefits, crippling cuts in payments to doctors who treat Medicare patients and automatic cuts to defense and domestic spending totaling $65 billion in 2013 — the so-called “sequesters” from last year’s debt deal.
The good news is, I guess if you can really call it that, that those changes would ultimately end up cutting the annual deficit by as much as $560 billion, from $1.2 trillion this year to $612 billion in 2013. Of course the resulting bad news is that without the government pouring billions into the economy in spending, and without taxpayers keeping more of their own money, which they, too, pump into the economy, gross domestic product can be expected to drop in early 2013 by, again, as much as 1.3 percent. “Given the pattern of past recessions as identified by the National Bureau of Economic Research, such a contraction in output in the first half of 2013 would probably be judged to be a recession,” CBO warned. For Congress, the outlines of the pending fiscal crisis are clear: Don’t do a thing, and watch the economy slip into a double-dip recession early next year. Or cancel the looming tax increases and spending cuts, watch the deficit rise, and push the government ever closer to a European-style debt crisis.
So I go back to my original question here. With us now teetering on the edge of what is surely a very substantial drop off, can we actually afford to even hope that there is sufficient will in Washington to prevent us from actually going over and plummeting into that vast abyss that lies below? Many have said that it's just too late, that the party can now safely be said to be officially over, with the only thing left being, the waiting for the fat lady to sing. But is it truly too late to get things turned around? Will anything that we can bring ourselves to do, in order to stem what many have said is our impending doom, be all for naught? Is it silly for me to hold out any hope that enough people will finally come to their senses in time for us to prevent taking that final, big, and sure to be fatal, plunge? I don't know, maybe it is too late to be doing anything about the direction we're headed. Maybe we should just all party until the lights finally go out.
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