Saturday, July 23, 2011

Budget Bumble

The "budget battle" is depressing in 37 different ways, but let's focus on two. The press, and the GOP leadership.

The press has done no substantive research on the underlying facts and has taken no position on what will and will not work to bring the economy back.  They simply repeat what the various spokespeople say, spinning it with headlines, vocal inflection and facial expression. Obviously they like Obama and want to end up reporting that he "won" and will now certainly be re-elected.  "Those people" who differ with Obama's wishes are simply not as smart and sophisticated as "we" are, but will our anointed leader be able to fool them again or will they insist on being really tacky?

The GOP leadership is empowered by the new group of freshman Tea Party firebrands, but unfortunately they still have habits formed in the years of Democrat Domination. They still see themselves as having to make a deal just to get keep getting invited to the party. They see the press as representative of the people in general, like it was 1960, rather than largely representative of liberals, as it is today.  They are "playing the old tapes over and over" and repeating their previous destructive behavior.

There is only so much tax revenue that can be collected from our economic engine without slowing or stopping it.  Lots of reading material out there for wonks, but it looks to me like 20% of GDP is the maximum we can expect to get.  So that's the most government can spend.  Debt, or as the British say, "gearing" works well for profitable businesses, but not for governments.  "Obama-nomics" seems to insists on collecting and or borrowing 25-30% of GDP and redistributing the excess amount above 20% to achieve "economic justice".  It also seems to ignore the concept that 20% of a strong and growing economy generates more tax revenue (and allows "do-gooders" to do more good)  than 30% of an overloaded and under performing one.

Democrats are like a teenage driver who doesn't understand gears, transmissions, fuel/air ratios or back pressure - when they want to go, they stomp on the accelerator!  If they are going up a steep hill, they just stomp harder and harder and look for someone to blame for the lack of response.

Republicans seem to be willing to  let the engine be damaged and try to pay the bill later, rather than have a confrontation with the the driver or insisting that they learn how the car really works.

And both sides are pretending that there is no real danger of blowing the engine completely, or driving the car off the cliff. I wish that were true.

No comments:

Post a Comment