Think about it - the Bush tax cuts enacted back in the year 2000 were set to expire in 2010, but were temporarily extended for two more years. The goal of the Democrats was ostensibly to kill those tax cuts which overwhelmingly benefited the rich, when they expired for the second time at the end of 2012. The deal that was just negotiated, however just locked in those tax cuts for any household making $450,000 or less - which covers 99% of American households. This deal keeps the unaffordable Bush tax rates in place for people making nine times the median household income. Sure, it worked great for me, I can't lie - since I'm not really the unemployed rage-a-holic I appear to be; however, unfortunately this deal just turned the U.S. debt into a non-amortizing brick (more on that below). What about the "poor" 1% ? Romney's 1% don't give a damn that their marginal tax rates are going up from 35% to 39.6% because Romney only paid 14% in the first place ! The 1% have tax shelters and tax breaks, like carried interest, that the rest of us don't get, so they never pay the top marginal rate anyway - duh !
Divide and Conquer
Now, however, lower taxes are locked in for everybody across the board - with no expiration this time. Game over man. Meanwhile, by separating the deal on taxes from the deal on spending, the right wing is preparing at this very moment, to pole axe Obama on spending in a few weeks, which is what he deserves for being such a duplicitous stooge of the right. Think about it, the right got what they wanted - a mere $62 billion dollar increase in taxes against a $1 trillion dollar deficit. Fucking chump change. Now however, they can take the gloves off and threaten a government shutdown to put massive heat on Obama & Co to cave on spending cuts (which they should anyway, especially defense).
And the Republicans have not one, but two swords of damocles to use against Obama - the "sequestration" which entails automatic across the board spending cuts which kick in at the end of February and the debt ceiling, which also requires congressional approval and which has already been breached. Meanwhile, Obama literally just gave away his only bargaining chip - higher taxes. So now with taxes off the table, and having lost the election to a "tax and spend" Democrat, Republicans will be overwhelmingly galvanized in their drive for less spending, so we can expect a much bigger and more rancorous battle in the coming weeks.
Of course the corporate owned stooge media just went along with this entire charade and packaged it as a "win" for Obama. All to ensure that the stewed masses at home would be conned into believing that their interests for once were being taken into consideration.
Bush + Bin Laden, a Fatal Blow
It's not as if any of these political games matter anyway. Osama bin Laden's 9/11 attack was a fatal blow to the economy, aided and abetted by the Bush Administration which vastly overreacted; all exactly as Mao's guerilla warfare manual would suggest. That is the entire goal of terrorism, not to damage the military, but to damage the economy. The ultimate war on attrition. It certainly helps when the nation's leader is a moron hill billy with no accomplishments whatsoever other than to dodge the Vietnam draft, run an oil company into the ground, and manage a baseball team. Bush's over-reaction to 9/11 was far beyond anything even Bin Laden could have imagined. Historians will discuss for centuries how a guy living in a cave in Afghanistan felled the world's mightiest empire. Of course, it greatly advanced the Bush/Cheney agenda that the U.S. is now run like an old folks home, in which fear, caution, and maintenance of the status quo are the overriding themes of the day. The below chart shows all of the combined factors that emanated from 9/11. The tax cuts themselves were implemented prior to 9/11. However, the other factors were all derivatives of that event. The wars are obviously related. TARP, Fannie and Freddie were a result of Greenspan's 1% interest rate policy instituted in response to 9/11 which led to the Housing debacle. The current "recovery" was made necessary by the 2008 crash. Twelve years after 9/11 all of these factors are still exerting a death grip on the U.S. economy. As you can also see below, all of these factors went into over-drive in 2008 when the unsustainable, liquidity-driven pseudo-economy fell off the Lehman cliff. Sound familiar? We are repeating the exact same liquidity-driven mistake now, but on a much greater scale by funding sovereign deficits with cheap money. And to think that this chart doesn't show the impacts of the massive near-doubling of defense spending initiated under Bush/Cheney, which was unrelated to the wars:
At this point, the U.S. debt is a non-amortizing. The deficit can't be reduced in any significant way because any attempt to do so would tank the economy and cause the deficit to rise. Depending upon what economic multiplier you use, the deficit is at least 10% of the U.S. economy and going up constantly as 10,000 Baby Boomers retire every day, placing more demand on Social Security and Medicare. Supply Side con artists who got the U.S. into this mess, would say we can "grow" our way out debt, something they've said for 30 years straight, even as the debt has grown at a 9% annual rate. The only way to reduce the deficit is to accept a lower standard of living today, meaning reduced defense, social security and medicare. This would entail austerity of the form being imposed upon the European nations (Greece, Spain, Ireland, Portugal). Just don't expect this comfort seeking society to ever willfully accept those measures. These spoiled Baby Boomers would rather run their own country into the ground than to make any changes of substance. They all assume that this illusion-formerly-known-as-the-economy is sustainable through their lifetimes and that their kids and grandkids will get stuck with the tab. So they will be rudely awakened when this shit show comes cascading down, inconveniently derailing their generational pump and dump strategy. In the meantime, they will be watching Faux News or MSNBC, hence oblivious to the overwhelming risk. Taken together, this means that the U.S. debt, like Japan's, is negative amortizing and will grow inexorably larger. It's only because today's politicians can't do basic math or face the truth that this deficit charade even continues. And these 1% plutocrats who have been dictating U.S. policy for the past 30+ years, don't have any skin in this game and don't give a damn about the economic future of the U.S. These people have millions in offshore bank accounts and can buy a foreign passport at a moment's notice.
Getting back to the chart above, it's clear that these tax cuts that were just made permanent, have been and will continue to be the biggest nail in the coffin. Congratulations to Obama for doing his part to help bury his own country.
Bush + Bin Laden, a Fatal Blow
It's not as if any of these political games matter anyway. Osama bin Laden's 9/11 attack was a fatal blow to the economy, aided and abetted by the Bush Administration which vastly overreacted; all exactly as Mao's guerilla warfare manual would suggest. That is the entire goal of terrorism, not to damage the military, but to damage the economy. The ultimate war on attrition. It certainly helps when the nation's leader is a moron hill billy with no accomplishments whatsoever other than to dodge the Vietnam draft, run an oil company into the ground, and manage a baseball team. Bush's over-reaction to 9/11 was far beyond anything even Bin Laden could have imagined. Historians will discuss for centuries how a guy living in a cave in Afghanistan felled the world's mightiest empire. Of course, it greatly advanced the Bush/Cheney agenda that the U.S. is now run like an old folks home, in which fear, caution, and maintenance of the status quo are the overriding themes of the day. The below chart shows all of the combined factors that emanated from 9/11. The tax cuts themselves were implemented prior to 9/11. However, the other factors were all derivatives of that event. The wars are obviously related. TARP, Fannie and Freddie were a result of Greenspan's 1% interest rate policy instituted in response to 9/11 which led to the Housing debacle. The current "recovery" was made necessary by the 2008 crash. Twelve years after 9/11 all of these factors are still exerting a death grip on the U.S. economy. As you can also see below, all of these factors went into over-drive in 2008 when the unsustainable, liquidity-driven pseudo-economy fell off the Lehman cliff. Sound familiar? We are repeating the exact same liquidity-driven mistake now, but on a much greater scale by funding sovereign deficits with cheap money. And to think that this chart doesn't show the impacts of the massive near-doubling of defense spending initiated under Bush/Cheney, which was unrelated to the wars:
At this point, the U.S. debt is a non-amortizing. The deficit can't be reduced in any significant way because any attempt to do so would tank the economy and cause the deficit to rise. Depending upon what economic multiplier you use, the deficit is at least 10% of the U.S. economy and going up constantly as 10,000 Baby Boomers retire every day, placing more demand on Social Security and Medicare. Supply Side con artists who got the U.S. into this mess, would say we can "grow" our way out debt, something they've said for 30 years straight, even as the debt has grown at a 9% annual rate. The only way to reduce the deficit is to accept a lower standard of living today, meaning reduced defense, social security and medicare. This would entail austerity of the form being imposed upon the European nations (Greece, Spain, Ireland, Portugal). Just don't expect this comfort seeking society to ever willfully accept those measures. These spoiled Baby Boomers would rather run their own country into the ground than to make any changes of substance. They all assume that this illusion-formerly-known-as-the-economy is sustainable through their lifetimes and that their kids and grandkids will get stuck with the tab. So they will be rudely awakened when this shit show comes cascading down, inconveniently derailing their generational pump and dump strategy. In the meantime, they will be watching Faux News or MSNBC, hence oblivious to the overwhelming risk. Taken together, this means that the U.S. debt, like Japan's, is negative amortizing and will grow inexorably larger. It's only because today's politicians can't do basic math or face the truth that this deficit charade even continues. And these 1% plutocrats who have been dictating U.S. policy for the past 30+ years, don't have any skin in this game and don't give a damn about the economic future of the U.S. These people have millions in offshore bank accounts and can buy a foreign passport at a moment's notice.
Getting back to the chart above, it's clear that these tax cuts that were just made permanent, have been and will continue to be the biggest nail in the coffin. Congratulations to Obama for doing his part to help bury his own country.
