By All Means, Let's Go Over the Fiscal Cliff

The so-called federal fiscal cliff is the combination of the expiration of the Bush-era temporary tax cuts, the temporary cuts to the Medicare and Social Security taxes, and a set of previously-enacted "automatic" spending cuts.  The conventional wisdom is that this will all be bad for the economy, and that that US should continue to borrow money from foreigners like to Chinese to spend on ourselves.

Only academics could buy that manure -- that the way to fight the effects of massive, long term overspending, much of it via borrowed money, is to borrow much more to spend more.  They argue that less federal spending will cause people to worry about the economy and, with less money in their pockets via higher taxes, they will spend less and therefore "hurt" the economy.

The US is functionally bankrupt and must cease going into deeper debt to spend on ourselves now.  Plain and simple.  And one reason the bad economy didn't hurt Obama as much as Republicans hoped for is that a huge proportion of the electorate has been shielded from the Obama spending binge because Republicans, those of the Stupid Party, pressured, or were duped into pressuring, Obama to go along with extending the Bush cuts a few years ago.  So taxes stayed lower while spending skyrocketed.

Enough.  Enough.  Although I don't want to pay higher taxes, especially to fund a Democratic party spending binge that primarily serves to increase dependency on big government (the prime Democrat strategy), people have voted for big government and now everyone must pay up.  When voters are fully paying for bigger government maybe then more voters will think twice about voting for it.

Avik Roy and Marc Thiessen agree (link).

John M Greco

Bears Win First de facto NFL Championship Game Indoors -- 80 Years Ago Today

The University of Chicago's "C" Logo

It was 1932 and at the end of the NFL season the Chicago Bears and Portsmouth Spartans finished tied for first place.  A play-off game was scheduled, the first ever NFL post-season de facto Championship Game, in Chicago.  Unfortunately, when the day came a blizzard dropped in and organizers scrambled.  The solution – move the game from outdoors in Wrigley Field to indoors at the Chicago Stadium. 

Yes, the first NFL post-season game was played indoors (link), on a field only 80 yards long.  The local team prevailed, as the Chicago Bears, the second oldest NFL franchise and the long-term, ahem, borrowers of the University of Chicago nickname Monsters of the Midway and football-shaped “C” logo (pictured; link), defeated the Portsmouth Spartans (now the Detroit Lions) 9-0 – 80 years ago today.
 
No doubt sensing a good thing when it saw it, the NFL honchos instituted an official post-season Championship Game thereafter.  The following year the first official one was played, once again in Chicago, and this time at Wrigley Field.  And once again the Bears prevailed, with a game-ending designed trick play (link), this time over the New York Giants.   

But times change.  The Bears have won only one championship in the past almost 50 years – the 1985 Super Bowl Shuffle Bears under former Bear player and Coach Mike Ditka.  They could use a trick play or two now. 

R. Balsamo

Want More Federal Tax Revenue -- Eliminate Deductibility for State & Local Taxes and Stop Subsidy of High Tax Democrat States

In all the "fiscal cliff" talk about how to raise more revenue for the federal government, one sure-fire way is conspicuously absent from the headlines -- removing or at least limiting the deduction for state and local taxes.  The reason for the non-coverge is a combination of Democrat obfuscation and Republican incompetence.  Obama wants more federal money -- OK, let's eliminate the deduction for state and local taxes, worth a cool quarter of a trillion dollars a year to the feds. 

But this will never happen because this "fiscal cliff" kabuki theater is not about tax fairness -- if it was the deduction would already be gone.  For Obama, it's about protecting Democrats by preserving an incredibly unfair aspect of the tax code.  Allowing taxpayers to deduct their state and local taxes from their federal income tax means they pay a lot less, for a given level of income, than taxpayers in states with low state and local taxes.  Deductibility results in a subsidy from low tax states (read -- Republican controlled) to high tax states (read -- Democrat controlled).

From the Wall Street Journal editorial of 12/17/2012 (link): 

·       One post-election budget surprise has been President Obama's resistance to John Boehner's proposal to get $800 billion in new revenue by closing tax loopholes. Here's one likely reason: the high tax rates of his blue-state Democratic brethren.... 

·       One of Mr. Boehner's ideas, taking a cue from Mitt Romney, would impose a limit on annual deductions....  

·       But suddenly liberals are having second thoughts, and our guess is that this is because residents of high-tax Democratic-run states are about twice as likely to take advantage of tax loopholes as taxpayers in low-tax states....  

·       One tax writeoff in particular illustrates the point: the deduction for state and local income taxes.... Because the highest federal tax rate is 35%, the value of the state and local deduction is enormous for high-tax states....   

·       One pernicious effect, however, is to favor high-tax states at the expense of the nine states with no income tax and those with low rates. That's clear from looking at the IRS tax return data for the 50 states and the District of Columbia.  In 2010, the deduction for state and local income taxes for all states amounted to $249.7 billion....  

·       But here's the blue-state kicker: $51 billion of those writeoffs were claimed by residents of one state, California. And five liberal states—California, New York, New Jersey, Maryland and Massachusetts—accounted for about $121.8 billion.  A mere five states accounted for nearly half the federal revenue lost from this tax deduction.... 

·       All of which helps to explain what appears to be the ebbing liberal support for a tax reform that reduces rates in return for fewer deductions.  Democrats in Congress once supported that kind of reform. But these days they tend to represent states with ever-higher tax rates that prop up state and local governments dominated by public unions that demand ever-higher pay and benefits. The resulting state tax burden would be intolerable if much of it weren't passed off on Uncle Sam.... 

·       Mr. Obama wants to raise tax rates, rather than eliminate deductions, so his fellow Democrats can keep raising state and local taxes without bearing the full economic and political cost....  

I would add to the last clip from the WSJ:  “Mr. Obama wants to raise tax rates, rather than eliminate deductions, so his fellow Democrats can keep raising state and local taxes without bearing the full economic and political cost....” and thus continue to play the taxpayers of Republican-dominated low tax states for suckers.

 

John M Greco

When the Going Gets Tough, the Republicans ....

From my somewhat desultory post-election reading, when I can rouse myself out of some eerie combination of disgust and dread, Republicans seem to be losing the public relations battle to the Democrats over the so-called "fiscal cliff" negotiations.  Just one more in a series of issues or sequence of events that should have strengthened the Party, but instead went essentially nowhere.  Despite the innumerable Democrat scandals, mendacity, and repulsive, corrosive behavior, Obama won anyway, narrow as it was, but it would have been a Republican blow out with the electorate of 1980, 1990, or, I think, even of 2000.  Times have changed, and the Democrat leftist/Alinsky strategy of in-you-face viciousness and win-at-any-cost tactics has, unfortunately and disappointingly, paid off, combined with the successful Dependency Agenda, to turn the masses into wards of the state and supporters of the Party of the State -- the Democrats.

The incomparable Michael Walsh sums up the current state of the Republican party today at National Review Online (link), essentially arguing, as he has for some time, that in general Republican Party leaders still have not recognized what they're up against, what the modern Democrat Party has become:

Fortune favors the bold, as the saying goes. The Romney fiasco should be the death knell of the Washington Generals approach to competing against the Democrats, and the whole lot of the Old Guard — starting with weepy John Boehner — should be tossed out and replaced with those who can distinguish between strategy and tactics and who understand that the only acceptable strategic outcome should be total victory over the modern Left and its alien, imported ideology. After all — that’s certainly the other side’s goal.

Of course, that depends on whether you see the current conflict as simply politics-as-usual, in which both sides share the same basic values and aspirations, and differ only in methods (the Boehner approach); or as a struggle between individualism and collectivism, which has been going on in Europe since Rousseau and his evil love child, Karl Marx, but is still relatively new to these shores. But extending the olive branch toward an opponent who’s not prepared to extend to you the slightest shred of moral or political legitimacy is suicidal. Unless, of course, you think it’s all a big game, a racket in which both sides have pretended to fight in order to divvy up the near-boundless swag of the federal treasury and keep the suckers back home happy come election time with a little kabuki and pantomime.

Accordingly, over the past two decades, the establishment Republicans — who knew the Rockefeller wing had such tenacity? — have nominated a string of reach-across-the-aisle types, and where has that gotten them? In the aftermath of 9/11, the author of the No Child Left Behind act was pilloried as a warmongering beast, McCain was savaged by his former “buddies” in the media as the walking dead, and Romney stood by mildly as he was accused by the Democrats of murder and Obama cried for revenge.

You can’t win a fight unless you’re prepared to credit your enemy with the will and the capacity to achieve his stated objectives, and as long as the Republicans continue to treat the Democrats as just a slightly more extreme version of themselves, they’ll continue to lose. On November 6, conservatives received a valuable object lesson in living inside their own bubble, slurping up what Fox News told them and believing that the ghost of Ronald Reagan’s 1980 electorate would once again show up at the polls, like the phantom army in Tolkein’s Lord of the Rings. Meanwhile, in the 40 years since they seized control of the Democratic party, leftist radicals have honed their divisive message and perfected their blunt-force tactics — all in the service of a strategy, as the actions of President Obama make abundantly clear.

Yes, there are 30 Republican governors and the Party hasn't been stronger at the state level for generations, and there are reasons for that strength that should be translatable to the national scene.  But it still is hard not to despair for a culture and politic predicated on promoting and protecting individual liberty, self-reliance, free-enterprise, and the rule of law.

John M Greco