Tuesday, November 22, 2011

Super Failure, or Success?


Thomas Sowell identifies the true and only significance of the "super committee," which ended its negotiations in failure.  Supposedly draconian cuts are to follow, which naturally will not transpire.  All that has happened is that blame for reckless spending will shift from the party that spent it onto the party that for the most part opposed it. 
If you think the goal was to solve the country's fiscal crisis, then obviously the Super Committee was a complete failure. But, if you think the goal was to improve the chances of the Obama administration being re-elected in 2012, it was a complete success.
Imagine that there had been no Super Committee in the first place. Who would be blamed for the country's fiscal crisis? The overwhelmingly Democratic Congress that voted to spend the money which increased the deficits more during the Obama administration than in the eight years of George W. Bush.

Two things got the blame shifted. The first was the national debt ceiling...  By the time a vote on raising the national debt ceiling was required, Republicans had gotten control of the House of Representatives. This meant that the national debt issue was now a bipartisan issue, whereas the spending that drove the national debt up to that national debt ceiling had been a problem strictly for the Democrats.
Appointing a bipartisan Super Committee with dramatic powers, and apparently dramatic consequences if they failed to reach agreement, created another long distraction in the media that took the president further out of the picture. When it came to media coverage of the country's financial crisis, it was almost a question of "Barack Who?"
A new Congress meets before these draconian cuts are supposed to happen — and no Congress can be forced to do anything by a previous Congress. So all this turned out to be a grand charade — and politicians are great at charades.
This one was a complete political success, because we are now talking about who is to blame for not coming up with a way of solving the fiscal crisis, rather than who did the runaway spending that caused that crisis in the first place.
An even longer-running charade is the budget-cutting charade, where big spenders promise to make spending cuts to match tax increases — or even to exceed tax increases. Of course the tax increases come first and the spending cuts are spread out into the future — and usually end up not taking place at all.
Aren't charades fun?   We'll have to remember that when the cost of credit default swaps, and the interest rate, on government debt skyrockets.  The bond market will not be laughing, or fooled, as events in Europe are presently demonstrating, and the meltdown of 2008 gave eloquent testimony to.

Should Democrats in the Capitol and in media succeed in foisting more taxes onto the populace in order to pay for restructuring the US economy in ways more amenable to Statists, then the economy will suffer.  President Obama and Senate Democrats acknowledged this, which is why they didn't let the Bush tax cuts expire last year.  

Ultimately, however, their calculation was political, not economic.  It concerned the American people's testiness, not well-being.  Democrats evidently don't care what happens to the economy if they can achieve their goal of state control over it.

The incessant wrong-headedness of Liberals amazes Noman, but doesn't surprise him.  The voters will decide if they want to drink the Kool-Aid, or put this issue to rest by burying the Democratic Party in the 2012 elections.


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