Tuesday, December 7, 2010


President Obama enraged his base last night when he announced his plans for a two-year extension of the current tax rates, potentially saving the country from a massive tax hike that it simply cannot afford right now.  Hopefully the lame duck congress will see that and support the plan Obama and the GOP hammered out.  To all those disappointed lefty millionaires and billionaires who were pushing him to raise their taxes (and everyone else's, too, because misery loves company, doesn't it?), sorry you didn't get your wish - but you can still feel free to put your money where your mouth is and make as large a deficit-reducing donation to the US Treasury as you would like - here's the link to help you out. 

Obama's progressive base are beside themselves with outrage.  He has betrayed them, he has given in to those eeeeevil republicans (who most likely tied him up and waterboarded him to get him to cave), he has lost his morals, his values...his very soul.  No less a lefty luminary than Dan Rather is hinting at the possiblity that his base will primary him for this offense.   

There are plenty of righties who are just as angry as the left at the deal that was struck.  After all, it includes another 13 months of unfunded unemployment benefits, something the White House is, ironically, touting as "stimulus".  Interesting how one president's evil, economy destroying tax cuts are another president's stimulus.    Ah, politics....  As for me, I applaud Mr. Obama.  I don't agree with him very often, but I agree with this deal, warts and all.  Compromise was needed, and compromise was reached. 

Mr. Obama and his progressive pals like to blame Bush's tax cuts for the failing economy but in reality, tax revenues increased (as did employment, median income, new wealth, and the stock market) under the cuts.   Which means the problem comes down to the policies the administration has pursued over the past two years.  If they hadn't spent like a pimp with a week to live, created an anti-business atmosphere of invasive regulation and oversight and the threat of heavy taxation, as well as shackling businesses (although more and more are getting waivers) and the public with the health care "reform" law, we would have bounced back from the recession that ended over the summer of 2009 and jobs would have begun to be created again. 

Ultimately, President Obama did what most presidents do - they govern according to what is best for the entire country, not just their hard-core base.  But it seems progressives despise anyone who doesn't walk in lockstep with them; even The One, who was practicallly deified two short years ago, is facing their wrath.  But while they are busy stomping their feet and having hissy fits, threatening Obama and anyone else who has a commonsense, rational option to the crisis at hand, the grown-ups are trying to right the ship of state and make the hard decisions.  Obama has made a first step in abandoning ideology and embracing the realities on the ground.  This well may be a watershed moment in his term, but not necessarily in the way his base thinks.

Obama also added in a little bonus goodie for the peons - a reduction in Social Security payroll taxes of 2%.  A six-month suspension of federal payroll taxes would have been most welcome, but this will do.  Add in the new death tax rate of 35% (as opposed to the 55% it was set to spike to on Jan. 1) that has been agreed on and the whole package seems to have a little something for everyone.  No, no one will be completely satisfied, of course - that is the nature of compromise.  But at least the country can move forward.  A tone has been set - compromise is possible. 

As compromises go, this was a pretty good one.  Obama gets his unemployment extension, the GOP gets a tax rate extension, businesses get a two-year window of stability which should result in some job creation, families who lose someone don't also lose the lion's share of their inheritance, too, and, most importantly, taxes aren't being raised during an economic downturn. 

The progressives need to start understanding that their far-left agenda has been soundly rejected by the rest of the country.  The historic losses of last month apparently didn't sink in, or they are actually buying their own lame spin.  Hopefully this will do the trick for them.  Progressivism is a noble theory, but, like many theories, it fails when put into action.  For a large portion of the country that reality was evident from looking at other countries who had gone the progressive route and failed. 

The recently revealed Fed documents outlining just how much American taxpayer money went to bail out those failing states illustrates this point.  The only reason Europe, in particular, has managed to survive (albeit in genteel poverty) all these years, as opposed to outright collapse, is due to the largesse of the US government.  If we follow the same path, who will subsidize our descent into the mediocracy that Europe has enjoyed for decades now on our dime?  For that matter, who will pay to allow Europe to continue down the progressive path once we collapse under the weight of excessive regulation, taxation and an ever growing welfare state?  China?  Could it be that in the 21st century countries will be liquidated and bought out instead of invaded and conquered with military might?  A checkbook conquest, if you will.  The thought would be laughable, if it weren't for the huge debts we are racking up.  How long before we default and China 'forecloses'?

So bravo, Obama and the GOP, for meeting halfway and forging a compromise for the good of the country, if not their respective parties.  It would have been nice if Obama hadn't demagogued the issue and accused the GOP of being "hostage takers", but whatever.  The two year experiment in progressive social engineering has failed.  It's time to start looking at other options.  This is a step in the right direction.  Our system of free market capitalism is what made us into the global powerhouse we were until recently.  It's success is evident in our meteoric rise to world power in the short time (globally speaking) we have existed as a country.  Capitalism is the secret to our success; it's failure (and the country's) was due to it having been over regulated, over spent and taxed nearly to death over the past decade or so.  It's time for a resurrection.

The progressives are howling right now, forecasting doom for Obama's reelection hopes, but this compromise could well be his first step towards reelection, because it is his first step towards the middle, after two years spent on the far left.  Perhaps he realized that appeasing his base, which constitutes less than 20% of the electorate, meant alienating moderates and independents, which constitutes nearly 40% - a substantially larger pool of voters.  That was the lesson he learned on Nov. 2nd.

Viva triangulation!



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