Why the Debt Ceiling Talks Fell Apart

Why the Obama-Boehner Talks Fell Apart
by Keith Hennessey

The President backtracked in private negotiations this week, demanding bigger tax increases after the Gang of Six, including three conservative Republican Senators, released a plan that raised taxes more than the President had previously demanded.

Today’s press stories treat this as a detail. It is instead the key to understanding why the talks fell apart.

Read the whole thing.




This appears to have gone viral already, but it certainly doesn’t hurt to contribute to its propagation.

Thomas Sowell on Tax Cuts

Dissecting The Demagoguery About ‘Tax Cuts For The Rich’
by Thomas Sowell

High rates drive taxpayers into shelters.

Mellon pointed out that, under the high income-tax rates at the end of the Woodrow Wilson administration in 1921, vast sums of money had been put into tax shelters such as tax-exempt municipal bonds instead of being invested in the private economy, where this money would create more output, incomes and jobs — thereby producing higher tax revenues for the federal government.

It was an argument that would be made at various times over the years by others — and repeatedly evaded by attacks on a “trickle-down theory” found only in the rhetoric of opponents.

Sowell remains a reliable spokesperson for the conservative movement.

Obama’s Fiscal Record

If you wish to read a full timeline detailing Obama’s prodigality, Rep. Paul Ryan has published one here:


The Democrats* consistently increase government spending whenever they’re in power. That’s why we can’t trust them in the current budget battle. Once they get their precious tax hikes, they won’t fulfill their other promises.

Historically, higher taxes have encouraged more government spending that matches – and then exceeds – the new intake. We need to break that cycle.

*And establishment Republicans.

Call His Bluff!

This seems to be the current rallying cry among the conservative commentariat. For example:

Call Obama’s Bluff
by Charles Krauthammer @ the WaPo

President Obama is demanding a big long-term budget deal. He won’t sign anything less, he warns, asking, “If not now, when?”

How about last December, when he ignored his own debt commission’s recommendations? How about February, when he presented a budget that increases debt by $10 trillion over the next decade? How about April, when he sought a debt-ceiling increase with zero debt reduction attached?

All of a sudden he’s a born-again budget balancer prepared to bravely take on his own party by making deep cuts in entitlements. Really? Name one. He’s been saying forever that he’s prepared to discuss, engage, converse about entitlement cuts. But never once has he publicly proposed a single structural change to any entitlement.

Hasn’t the White House leaked that he’s prepared to raise the Medicare age or change the cost-of-living calculation?

Anonymous talk is cheap. Leaks are designed to manipulate. Offers are floated and disappear.

Say it, Mr. President. Give us one single structural change in entitlements. In public.

As part of the pose as the forward-looking grown-up rising above all the others who play politics, Obama insists upon a long-term deal. And what is Obama’s definition of long-term? Surprise: An agreement that gets him past Nov. 6, 2012.

Nothing could be more political. It’s like his Afghan surge wind-down date. September 2012 has no relation to any military reality on the ground. It is designed solely to position Obama favorably going into the last weeks of his reelection campaign.

Krauthammer then goes on to propose that the Republican House pass a short-term debt ceiling hike coupled with budget cuts. Personally, I think Krauthammer is probably right. We really aren’t going to accomplish anything more until we get Obama out of the White House.

Quit Lying!

I endorse the following:

(Hat tip to Red State.)

Meanwhile, our Republican House needs to hurry up and introduce a bill that will clearly prioritize Social Security/Medicare/military pay/etc. over the bunny inspectors (hat tip to Jerry Pournelle) just in case we really do hit the debt ceiling without reaching some sort of acceptable compromise.

Quick Quote: Ideas First, Elections Second

I had a long day at work today, and I’m exhausted. Therefore, I am postponing part three of my work-in-progress until tomorrow. In the meantime, I heartily endorse the following statement:

“Suppose Republicans win next year because we are ‘not the other guys.’ Then what? Winning is necessary but not sufficient to save our country from fiscal disaster. Two years later the Democrats will still be offering free stuff and the postponement of pain. We can’t win the several subsequent elections that will be necessary to put us on the right path unless we win the war of ideas and develop the ability to explain why restraint and reform are necessary and that fostering a nation of free people, free markets, and the rule of law is not only morally just and right but is the only way to sustainable growth and prosperity. Otherwise, we become participants in our own demise, for the sake of short-term political expedience.” – Fred Thompson (at NRO)

No – It’s Not Hypocritical to Oppose Legal Abortion and Support a Conservative Budget Policy

There’s a certain complaint that my leftist acquaintances trot out all the time, and it goes a little something like this:

“These stupid tea baggers are always complaining about the intrusiveness of government, yet they’re perfectly happy to allow government to tell us what to do when it comes to things like abortion. What hypocrites!”

Unfortunately, this line of argument has turned out to be very powerful. Many conservatives have drifted over into the fiscally conservative/socially liberal camp precisely because they cannot effectively answer this charge. But they should not have conceded ground in this way. There are ways to strike down the left’s childish claims of hypocrisy, and if you’ll permit me a little time, I can demonstrate what I mean.

First of all, the argument above is based on a highly debatable premise. It assumes that the decision to have an abortion is similar to any decisions we may make in the economic realm. But we in the pro-life movement believe that the decision to have an abortion belongs in an utterly different category. We believe that the fetus is a human being just like all of us who happen to be walking about and that he or she therefore deserves to be accorded the very same right to life that the rest of us enjoy. Having an abortion is not like deciding whether or not to buy an electric car; in our view, it is murder — a murder which takes place under many guilt-mitigating circumstances, but a murder nonetheless. And from this basic premise, we logically conclude that it is right and proper for government to seek to curtail the practice of abortion, just as the government correctly seeks to discourage other forms of murder.

But what about other instances in which the right attempts to “legislate morality”? Well, that brings me to my second argument: that the left fails to understand how the conservative philosophy fits together — how it is all of a piece. As I discussed in my series on the federal budget, a conservative believes in at least four different levels of government – 1) the individual/family/immediate community level, 2) the municipal/local level, 3) the state level, and 4) the federal level – and it is absolutely critical to our model of governance that all of these levels be in working order. How does morality fit in to all of this? Well, in our view, those moral standards that we conservatives are so keen to enforce are what truly allow the first level – the individual/family/immediate community level – to operate. Without those standards, families and communities fall apart and ever larger government entities are forced to pick up the slack.

Now, I suppose we could let people run riot on the bottom floor and let the upper floors take over, but in the real world, that turns out to be an inefficient – and often degrading – strategy. Would you rather have a representative of the federal government tell you to eat right and exercise on a regular basis, or would you rather have your own mother give you that advice? Well, if we allow the left to bully us into conceding that traditional marriage isn’t really necessary after all, pretty soon, very few will have the chance to pick the latter option. Mom, now husband-less, will be too busy working.

In the end, we conservatives believe our opponents have it completely ass-backwards. Leftists see something in the socioeconomic sphere that legitimately offends their sense of justice – sexual harassment, for example – and decide we must have more and stiffer federal laws. In other words, when they see thousands of young children drowning in a raging river, they immediately jump in the water to save all the children they can see and don’t worry over whether that’s really the most prudent or efficacious course of action. Conservatives, on the other hand, see the same injustice and wonder whether some sort of moral breakdown – a fault in the first link of the government chain – might be a contributing factor; in the case of the sexual harasser, for example, a conservative will note – correctly, I feel – that it is difficult to train young men to treat women with respect in the meat-market that is the post-sexual revolution dating scene. In other words, when conservatives see thousands of young children drowning in a raging river, they tell at least one of their number to walk upstream to see who’s throwing the children in the water to begin with. (And if that particular conservative is of a military bent, he’ll probably kick the child-murderer’s ass.)

We can’t write public policy solely to assuage our own feelings of indignation, and we can’t write public policy to satisfy some ridiculous standard of ideological purity. We have to write public policy that works first and foremost. And as far as we conservatives can see, the leftist plan to slacken the reigns on our morality while tightening the reigns everywhere else simply doesn’t work. It sends our society into a tailspin that a constantly expanding government bureaucracy can’t possibly arrest.

The Federal Budget, Part V

Before I move on to my final principle of fiscally responsible governance, allow me to summarize the guidelines which have been discussed so far:

  • Subsidiarity. Many public goods can be achieved at the local level without getting the federal government involved. Thus, when evaluating the merits of a particular federal program, we should always ask ourselves whether it would be wiser to allow a community group or local government to assume responsibility instead.
  • Accountability. Each and every government bureaucracy must be required to demonstrate – on a regular basis – that it is getting results — and that it is doing so at the minimum ethical cost. It is irresponsible in the extreme to shield some federal programs from this kind of scrutiny on the basis of their intended missions.
  • An Absence of Favoritism. The federal government should refrain from awarding subsidies to politically active businesses. These subsidies and special favors have wide ranging effects on the economy which, in many cases, disproportionately hurt the poor (corn subsidies being the most egregious example).

Now let’s add to this list the principle of sustainability:

  • Sustainability. When designing a new government program – or when evaluating an old one – we have a moral duty to ensure that, barring complete civilizational collapse, future generations will be able to enjoy, at the very least, the standard of living that we enjoy. This means that we have to be flexible enough to accept reform when circumstances change.

Obviously, this last principle is especially relevant when we’re discussing things like Medicare and Medicaid, Social Security, welfare, public pensions, etc. As I stated in the first post of this series, I believe the federal government does have a responsibility to maintain a minimum social safety net — but it certainly won’t be able to do so if our politicians continue to insist upon pissing money away instead of exercising their common sense.

When the Social Security program was first created in 1935, the average life expectancy was about 60 years for men and 64 years for women. Indeed, many people failed to reach the age at which they would begin to receive Social Security benefits. But as we all know, that is no longer true today. Thanks to medical advancements, many Americans are living until they are 80 and beyond. Thus, many receive Social Security benefits for fifteen to twenty years before they finally pass on. Moreover, we are just about to experience a huge spike in Social Security pay-outs as the “Baby Boom” cohort finally reaches retirement age.

The upshot? While we Americans are fecund enough that we are not quite in the same boat as the rest of the developed world, we are still facing a genuine entitlement crisis. Those of us who are in our 20’s and 30’s and are aware of what is happening are pretty damned skeptical that we will see a single cent of the funds we are currently pouring into Social Security if the program isn’t reformed now. At the very least, the retirement age needs to be incrementally raised to a level that is more commensurate with the current life expectancy.

Additionally, our social programs need to be streamlined across the board. Just as there is a lot of duplication and redundancy in, say, the NOAA, our safety net is remarkably inefficient. The GAO recently reported, for example, that there are 80 separate programs within the government just to help the poor see to their transportation needs. Good gravy! Think about how much we must be wasting paying for the office space and staff expenses! We must find some way to gradually consolidate these entities so our nation doesn’t collapse under the weight of her own debt:

Thanks, Iowahawk. You’re a genius.

Throughout this series, I don’t think I’ve ever proposed a change in policy that is unreasonably harsh. No — the only radicals in this debate are the leftists who would have us ignore intergenerational justice in favor of keeping the spending party going for those of us who happen to be walking about. Such policies may sound wonderful to voters in the short term, but given that money does not grow on trees – not even in Obama’s rainbow and unicorn garden – they will almost certainly end up screwing our children. We shouldn’t cede the moral high ground to the Democrats’ prodigality.