Was the tax increase a major Republican loss?

Today’s big story the new tax bill that Obama jetted off to Hawaii before signing, but that will soon (and inevitably) become the law of the land.  I don’t see any surprises.  I knew that we’d get hit hard and so we have.

I gather that sequestration has now been averted, so that Obama gets to continue spending.  As the headlines say, $1 in spending cuts for every $41 in tax increases.

Obama laughing

The media and the blogs are playing this as a major Republican loss.  Although I’m not sure it is, I actually rejoice in these headlines.  They sting, but they may have a benefit in the long term.

In my simplistic financial view of the world, there is one given that transcends any fancy economic talk from Ivory Towers and Leftist back rooms:  you cannot indefinitely spend more than you take in.  This is true whether you’re a person or a nation.  You can certainly spend more than you have for a while.  Indeed, if you’re rich (as America once was) you can keep spending money you don’t have for a long time.  You can borrow from friends who haven’t quite figured out yet that you’re broke.  And you can check kite — that is, you can use one empty account to pay off another empty account.  Essentially, you keep the same money floating around between accounts for a while until one of the banks or creditors figures out that you’re simply juggling a few dollars around and hoping that no one catches on that your accounts are usually empty.  And that’s all you can do.

Obama ran for, and won, re-election on a promise that he could fix our problems by taxing “rich” people more, while continuing to spend as before.  The voters bought it.

Another way to think of Obama’s promise, and the voter’s credulity, is to imagine that America is a corporation, with shareholders and various officers.  Obama is the CEO.  Because the CEO and his fellow officers have been spending corporate money like crazy without realizing a profit, the corporation is broke.  It’s worth noting that some of that spending involved distributions to select shareholders — those holding the fewest corporate stocks.

When the shareholders were considering making a push to fire the CEO, the CEO kept his job by telling the shareholders that he’d hire some armed robbers (i.e., the IRS) to force some of the richest shareholders to buy more shares in this essentially bankrupt company.  He made no promises about reducing corporate spending or trying different approaches to dealing with corporate debt.  The shareholders, none of whom could imagine himself (or herself) as being “the richest,” thought it was a great idea to have the “other shareholders” forced to subsidize the corporate spending binge. Those most enthusiastic were the ones who, despite holding the fewest shares, had been getting stock distributions on a regular basis.

Robber

Once his job was assured, the CEO used his renewed power to do exactly what he promised:  he brought in armed robbers to forcibly remove money from the “rich” shareholders without changing his management style, including his spending habits.  The only thing that surprised some of the shareholders was to discover that the CEO numbered them amongst the rich.

In other words, Americans — the shareholders in this nation — just got exactly what Obama promised and they voted for:  more taxing, more spending.

The question, then, is whether yesterday’s vote to increase taxes is a major Republican loss.  Certainly, the Republican party is in chaos — but it was anyway.  After the election, the Republican party was a demoralized, writhing, screaming, finger-pointing mass of loser-dom.

Pathetic loser

Given the Republicans’ already pathetic posture, is what happened yesterday even worse for the Republicans?  I don’t think so.  I think that, with the mid-term elections coming, this clarifies things for voters.  It doesn’t just clarify Republican and/or conservative principles, it also clarifies just who holds those principles.

White House Money Machine

More than that, the new taxes and spending clarify responsibility for America’s economy.  Obama got exactly what he wanted and he thinks that he’s laughing all the way to the bank.  Except when he gets to the bank, he’ll discover it’s still empty.  Within a few months, he’ll be thinking of that adage “be careful what you wish for; you might get it.”

Things are certainly going to be bad, very bad, for America in the short term.  But with a true compromise, of the type Boehner was trying to craft (proving either his good faith or his stupidity), things would have been very bad for America in the slightly longer term.  Short of a revolutionary change to America’s spending habits, which wasn’t going to happen with a compromise, America was always screwed.  Now, at least the Republicans can say “we tried to stop this, but Obama had a stronger political hand in the wake of the elections, so we were forced to give him what he wanted.  This is now, for real and for true, the Obama economy.”

Obama frowning

The one thing to remember is that Republicans had better start selling this Obama-economy message hard and fast now, while Obama and his media minions are still gloating about his victory over the GOP.  Once things go sour, as they inevitably will, Obama and the media will start blaming the Republicans.  We know that, where the media leads, the masses follow.  The only way to stop the sheeple is to drill home now the message that this is Obama’s victory, that Obama got what he’d promised and what he wanted, and that Obama joyfully accepts the responsibility for whatever flows from his glorious battle defeating the Republicans.

Remember:  Nothing, absolutely nothing, that came out of Congress today could have been good for America.  However, if Republicans willingly hand Obama this victory, the greatest likelihood is that it proves to be a Pyrrhic victory for Obama, with long-term benefits for conservative thinking and, therefore, for America.

(Alternatively, Obama could have been right all along, which will be good for America, and I’ll have to revert to my original Democrat allegiance.  Possible, but not probable.  Facts are stubborn things and so are numbers, and I’m betting that Leftist political ideology will not trump either facts or numbers.)

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  • http://OgBlog.net Earl

     
    “The one thing to remember is that Republicans had better start selling this Obama-economy message hard and fast now….”
     
    Still dreaming, are we, BW?  
     
    What is there, in our recent history with the “Stupid Party”, that makes you think that such a move is even being considered?
     
     
     

  • Caped Crusader

    There’s an old country song about hanging out with a better class of losers, if I hear it, I will think of Boehner and his minions. Tell me why this would not have been a better course of action:
     
    Boehner to Obama: Mr. President i have a DEAL for you. The American people gave you a mandate you claim, AND THEY NEED TO LEARN THAT ELECTIONS HAVE CONSEQUENCES. You draw up the bill of your hearts desires. Everything you want. Send it to the Senate and you must get your party to support it 100%. The House will reject it with 100% no votes from Republicans. Then we will have a second vote, but prior to that we will assemble on the Capitol steps and draw Republican names by lot for the exact number of our votes it takes to pass your bill. Your bill will pass and you and your party OWN it 100%. You get the credit or the blame, depending on how it works out. This way we can not be blamed if it is a disaster and you will get the blame and there is no way your fawning press can blame us.  This way it is a win or loss for you and yours only.
     
    This puts the ball entirely in their court and let them stew and scramble!

  • Wolf Howling

    When Obama won, this tax increase was inevitable.  It would have been much better for the Republicans to simply announce, about Nov. 10, that Obama campaigned on tax increases, that there is nothing at all the Republicans can do to stop them given that they were going to occur automatically with the expiration of the Bush tax cuts, and that, on that issue, they would simply allow Obama to give Americans what they voted for – good and hard.  They might also have noted that the left – who claimed the Bush tax cuts were horrible policy and responsible for the deficit, where now wholly embracing 98% of those same tax cuts.
     
    The net effect of those tax increases will be easy to project, particularly coupled with the tax increases under Obamacare.  They will bring in appreciably less revenue than projected.  Our economy will, at best, sputter along at the current anemic growth rate, if not lower.  And employment will not improve in the least.  But that’s fine – America needs to see it.  It alone won’t destroy our nation and is subject to remedy at the ballot box.
     
    The same cannot be said about our insane accumulation of debt.
     
    Which leads to the second thing Republicans should have announced on Nov. 10.,  that they were elected to bring sanity to our economy where they could and thus, that they are drawing the line on spending and borrowing before the Democrats turn us into Greece.  They should note that the power of the purse and the power to authorize borrowing resides solely in Congress, not the Presidency.  There will be no more borrowing to fund spending not covered by revenues, and indeed, nothing will come out of the House other than a life support budget until Obama submits a plan, approved by both Houses and signed into law, that will actually reduce the deficit by 20 to 25% during his 2nd term. 
    That is what should have been announced on about Nov. 10.  Instead, we get Republicans signing off on an 11th hour bill that not only addresses taxes, but is full of pork projects that should be at the very tip top of the spending that needs to be cut – specifically, the 12.1 billion wind tax credit, 59 million for cellulosic ehtanol (which doesn’t exist yet in commercial production), and 248 million for those starving Hollywood producers to turn out more left wing propaganda.   Anyone who voted for that particular bill with those goodies in it needs to hear from all of the people they were elected to represent.
     
    I don’t know, Book.  This is not a catastrophic defeat for Republicans, but it has been handled poorly at every turn.  

  • jj

    Hard to disagree, Wolf, but expecting thought, logic, and quick footwork from John Boehner is about like expecting your dachshund  to get good on the violin.
     
    Time for the republican party to go, they have long outlived their usefulness.  They deserve to be catastrophically defeated.  In fact they deserve to be run out of town and into the sea, for all the good they’ve done that last twenty years.  The only difference between them and the democrats these last decades has been that they seem to want to take us to hell a little slower than the dems do – but the destination’s just the same.  We don’t need that, and I for one no longer recognize it as a useful concept.
     
    We need a revolution.  That means revolutionaries, not the republicans, who seem not to have more than the vaguest idea who the hell they’re supposed to be.  That’s not helpful.  So kick them out, and start again.  (Which is, by the way, how the party got started, when Lincoln and his pals [old Honest Abe was a nut-cutting professional politician, no matter what Spielberg thinks] croaked the moribund whigs, and replaced them with a new formation.)  And here we are, with the moribund republicans, sclerotic thinking, no ideas, zilch to offer.  Time to move on.

  • http://OgBlog.net Earl

     
    jj: Not much to argue with there….except that I think there are members of the GOP who could lead a revolution if they were elevated to leadership.  Hannity interviewed a couple of the guys Boehner threw off their committees last month, and they’ve got the right ideas…..Gohmert of Texas was one, and I can’t spell the other, but it’s something like Foolscamp.
     
    I’ll have to admit I’m floored that Ryan voted for the bill to avoid the Cliff…what was he thinking?  Brain addled the thin air at the top of the Party?  Sheesh…it’s exactly what he’s been preaching against for YEARS!

  • Spartacus

    I read somewhere in the last few days that the Speaker of the House does not necessarily have to be a Member.  How about Allen West?  We need someone who is willing to reach across the aisle… with a bayonet, and a huge grin on his face.
     
    The DC Beltway is like the rim of a toilet: many fine people jump into the swirling, toxic mix with the best of intentions, but are ultimately sucked under and begin to resemble that in which they are constantly immersed.  It takes a very strong sense of purpose external to both oneself and The Beltway to keep one’s head above the surface and keep one’s bearings.  Unfortunately, the lot who frequently are most persuaded to stand for election are those seeking self-actualization through the affirmation of society, and these are precisely the wrong sort to hold their own in that putrid bowl.  We need people who seek victory instead of compromise, and aren’t afraid of being hated.
     
    It has been said that a Movement becomes an Organization becomes an Institution becomes a Museum.  So, since the GOP is now closed for cleaning on Mondays and offering discount tours of new exhibitions for seniors on Thursdays, what do we do?  There are still many fine pieces in the collection.  But we’re at the point that if conservatives are not in a position to win the GOP primary in a given race, it would be best to go third-party against the squishiest of the RINOs and if not win the final race, then at least take out the trash and help purify the party.

  • Danny Lemieux

    Someone recently made the very astute observation that the dome of the Capitol resembles one big teat.
     

  • Caped Crusader

    Danny, and one that has been “enhanced” at that!

  • Danny Lemieux

    …with an artificially inflated bubble.

  • Spartacus

    In Xanadu did Kubla Khan
    A stately Capitol-dome did decree… ?
     
    Nope.  Not going there.  Bad idea.  Not gonna do it.  Wouldn’t be prudent.  Too weird for a Thursday.

  • Charles Martel

    Does this mean we rename DC “Hooterville?”

  • http://ymarsakar.wordpress.com Ymarsakar

    Electing Democrats have had negative consequences for inner city blacks and whites for a long time now. That hasn’t stopped them from maintaining that Leftist power base in the inner fiefdom cities, however.
     
    2008’s election in DC resulted in 93% votes for Obama. In some of the inner city ghettoes controlled by black thugs and Democrat politicians, the number reaches 99%. Let me just remind you that Saddam was never able to get 100% votes, only 99%. One wonders why if counter insurgency is such a valued thing for Iraq, Americans don’t consider it for the inner cities.
     
    It is no longer about who wins elections any more, if ever it was.

  • Danny Lemieux

    Hammer, I propose “The Giant Suck”.