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Tuesday, January 1, 2013

The Fiscal Cliff 2

The Senate has a fiscal cliff proposal.  It calls for 15 billion in spending cuts and 620 billion in tax hikes.
(Recall that the Dems want the problem solved by tax increases and Reps want it done by spending cuts.)

5 things about this deal.

1.  Oviously it is an overwhelming "win" for the Dems and their preferences by roughly 40 to 1.

2.  If the House does not go along they will be the ones labeled by the media as intransigient.

3.  This is a ten year proposal which will produce "savings" of $63.5 billion per year.  The ANNUAL deficit is well over $1,100 billion.  That means that this proposal is 5.7 % of the solution of that short term problem and does not deal at all with the long term issue of entitlement reform.

4.  Nobel prize winner Paul Krugman a supporter of Obama, taxes, borrowing, and spending tells us his view in conceder in chief.  As the title suggests that he views it as a loss by Obama.  In fact he says at one point that "it’s a bad and upsetting deal".  However, he also notes that there were "no spending cuts at all."

He also told us that the really bad thing about this deal is that Obama did so badly that:  "Republicans will go right from this negotiation into the debt ceiling in the firm belief that Obama can be rolled."

What kind of proposal would it take for Krugman to consider it a win?

5.  One wonders what happened to the Constitutional requirement that revenue bills begin in the House?
(added at 7:15 PM - Perhaps the Senate bill is not original but rather a revision of a previous House bill.)

1 comment:

  1. Arithmetic

    Remember those word problems in grade school. A worker makes $100 per week and spends $150 per week. How long can the worker continue to do this?

    I will match the math skill of a 3rd grader against all of the accolades, educational credentials and Nobel laureate recognition heaped on Paul Krugman.