Debt ceiling postures and pretense
Barack H. Obama pretends to be reasonable about the national debt and debt ceiling. Last night the pretense failed.
Dueling debt ceiling news conferences
The man now holding office as President called a news conference after House Speaker John Boehner (R-OH) broke off talks for raising the debt ceiling. Several times during his opening speech, Obama said that he was not interested in pointing fingers or laying blame. Whenever anyone says that, especially more than once, he usually does not mean it. Obama proved no different. He blamed Republicans for not being able to say “Yes.” He blamed Boehner in particular for not “get[ting] control of his caucus.” In short, he sounded like an angry judge telling a divorce lawyer to get control of his client.
Boehner didn’t appreciate that. An hour and fifteen minutes later, Boehner accused Obama of bait-and-switch. Boehner had agreed to raising $800 billion in new revenues. Obama wanted $1.2 trillion. Boehner knew that only a massive tax increase could raise that. He also knew that the American public, who nearly jammed the Capitol switchboard and e-mail servers with protest calls and messages, would never accept that. (Whether John Boehner would accept that, if he had his way, is anyone’s guess. William Kristol seems to think that he wouldn’t. Other activists are more skeptical.)
The best thing that Democrats do is tax
Taxes, of course, are the Democrats’ favorite tool. From Senate Democratic Floor Leader Harry W. Reid (D-NV) to House Democratic Whip Steny Hoyer (D-MD), the message is the same. Without the power to tax, they cannot do their favorite social engineering. They know it. And that’s what they complain about. So when Hoyer says that the Republicans want to “permanently enshrine their own partisan budget priorities in law,” he really means that curtailing the taxing power would destroy the Democrats’ partisan budget priorities.
What would really happen to Social Security?
Social Security is a special case, though Obama pretends that it isn’t. It has $2.4 trillion in special government bonds in its “trust fund.” If Social Security cashes any of those in, the government isn’t borrowing that money anymore and may freely borrow it from somewhere else, debt ceiling rise or no.
The problem, then, is that the Social Security taxes might not cover current checks completely. But Obama has no excuse for not cutting those checks on time. As Thomas Saving said in this morning’s Wall Street Journal, Obama must want to spend that money on something else.
Sadly, the law allows him to do that. In Helvering v. Davis (301 US 619, May 5, 1937), the Supreme Court held that the Social Security tax system was constitutional because the law does not dictate where the government can spend the money. That’s another pretense that Obama seems to have dropped: the idea that Social Security taxes go to support Social Security and only Social Security.
Where do we go from here?
In about an hour, yet another White House meeting will take place. Most observers do not expect the two sides to agree. So the debt ceiling might not rise after all.
Featured image: the classic Weimar-era illustration of wheeling a barrow full of money to buy a loaf of bread.
- Breakdown and bluster
- Scares and spending
- Sound and fury
- Gang of six
- Cut cap balance vote set
- Questions for Mr. Obama
- Warnings and postures
- Misconception and mush
- Cowardice and confusion
- Theater and outrage
- Deal falling through
- Day of reckoning
- Talks break down
- The media battle
- Battle lines
- Debt ceiling reached; sky does not fall
- Contradictory warnings
- Weimar redux?
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Note: CBS News disabled embeds on their video of the Obama news conference.
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Terry A. Hurlbut has been a student of politics, philosophy, and science for more than 35 years. He is a graduate of Yale College and has served as a physician-level laboratory administrator in a 250-bed community hospital. He also is a serious student of the Bible, is conversant in its two primary original languages, and has followed the creation-science movement closely since 1993.
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We have to generate more tax revenue. This is just the mathematical reality of the situation. George W. Bush spent this country into the poorhouse with his wars he never bothered to think about paying for, and by dropping tax rates to below the level required for financial solvency.
This really isn’t that hard to understand. SimCity makes it easy to understand that a government on any level has to have tax revenues in order to provide any services at all for their citizens. Currently the United States doesn’t generate enough tax revenue, and we’re not providing the services we should. Our infrastructure is collapsing, and if we don’t fix it, the effect on our economy will be stifling.
There’s no evidence that raising tax rates will hurt the economy, and in fact, the economy has typically done better over the past thirty years when tax rates were higher than when they were lower. Crime rates also fall when tax rates are higher. Apart from the inconvenience of having the pay more, there is no argument against raising taxes.
The tax situation is easy to solve, in a way that will not require any real money from the middle class at all: Raise the capital gains tax. That’s it. That’s the only tax we need to raise. It’s too low, and if we can give that a significant increase, our deficit problems will disappear.
Currently, I’m thinking that the richest Americans, who make up that vast majority of the top levels of our government, are anarchists who want to see the country fall apart. They refuse to contribute to the system that has made them rich, showing a willingness to let everything fall apart just to avoid paying taxes. This is despicable and also incredibly dangerous. Currently, we are moving into a situation much like that in North Africa before the “Arab Spring” only with far more on the table. This is a threat to the stability of the nation, and a situation that could become explosive if this isn’t resolved.