Saturday, December 25, 2010

Tuesday, December 07, 2010

Tax compromise

Did anybody watch President Obama's speech regarding the tax-cut "compromise"? He clearly looked anguished and unhappy about it, but I don't think he had much choice. Not only because the Republicans vowed to block passage of the bill unless/until they got their way, but because they also vowed to block ALL other legislation until this issue was settled (in their favor, of course).

And there are very important bills that need to be voted on and passed. The START treaty, Medicare payments to doctors (due to be cut by 25% in January), DADT, and more.

So, it was important to get the tax-cut issue settled so that this other important work could get done, instead of everyone just sitting around while the Republicans stomped their feet like children.

I feel bad that people are saying that President Obama "caved" or that he "has no backbone". I think that he was backed into a corner and he did the best with what he had. To stupidly hold out for something that is never going to happen just for political reasons would have been worse. When all the people who are criticizing him for compromising saw their taxes go up in January, they would have been complaining about him at that time instead, for breaking his campaign promise not to raise taxes on the middle class. He couldn't win either way, so he agreed to extend the cuts only for two years and he at least got a 13 month extension of unemployment benefits added to the bill, among other things. I believe he tried to do what he thought was best, given the circumstances.

For the record, I am part of the 14% of Americans who think all of the tax cuts should just expire. The only reason we even had the tax-cuts is because Bush entered office with a massive surplus, and instead of paying down some of our debt, decided to give the money back to the people via tax-cuts. They were so unpopular with Congress at the time that they were passed via **GASP** reconciliation and were given a set expiration date for that reason. Now that we have a huge deficit, taxes should go back up again. But, that's just my opinion. Obviously the majority of Americans don't agree with me. Oh, well. It isn't the first time I've held an unpopular opinion.

Now let's hope that the Republicans keep their promise, and vote to pass the compromise that they agreed on.

Cat

Thursday, December 02, 2010

You Fix The Budget

Think you can do a better job than our lawmakers at reducing our federal budget deficit? The NY Times offers you a chance to try. It's not as easy as it would seem.

I was able to bring us back in balance by 2015, with a mix of 33% spending cuts and 67% tax increases (I brought back a hefty estate tax and taxes on capital gains), but I was unable to keep that balance through 2030.

I'm sure there are many other choices than this exercise gives, but it's still a fun way to see how your choices would affect the budget. I tried to think of unintended consequences as well. Would reducing federal aid to states by 5% force the states to work more efficiently, or would it cause them to lay off workers or cut social entitlement programs? I chose to think it would force them to work more efficiently.

Try it yourself, here. Let us know how you did!

Cat