If the latest plan goes through, the Bush tax cuts will be extended as per the Republican Congress, but unemployment benefits will be extended and payroll taxes cut as per Obama. Result? Almost a trillion dollars in additional deficits over the next two years.
I was hoping for a repeat of 1994. With a Democrat in the White House and Republicans controlling Congress, budgets shrank and the country got its finances in order.
Of course, back then, we had Ross Perot beating the drum for deficit reduction, Republicans who really wanted smaller government, and a Democrat President who was willing to cut guns and butter.
Now we have Bush-era Republicans who love cutting taxes without cutting expenses and a Democrat president who loves spending more money without raising taxes. It’s like a perfect storm for fiscal irresponsibility.
So much for that smaller, more responsible government the voters asked for in 2010, Republicans. You guys talk the small government talk, but don’t walk the walk. Obama voters are likewise disappointed in their man.
Here’s a breakdown of the costs of the tax cuts and additional spending, from Megan McArdle. The vilified “rich”-over-$250,000 folks had surprisingly little to do with it. It was mostly “poor” bastards like me making less than that who got the lion’s share of the tax cuts. Here’s a crazy idea: cut spending. It’s as if our leaders can’t imagine that there’s any part of government that couldn’t be more efficient.
Needless to say, this will be another trillion dollars the Federal Reserve will have to print. That’s on top of the $600 billion in Quantitative Easing 2 that’s already in progress, and on top of current budget deficits of a trillion dollars per year. Buy gold and silver, folks.