by Gennady Shkliarevsky
The conflict over the debt limit is reaching its critical stage. All facts point to one conclusion: the Democrats and the Republicans stand on opposite poles, and the prospects for a solution are very dim. Naturally, the two sides blame each other. The main battle for the minds of the American voters has started. Americans voters must make up their mind.
Politics rarely, if at all, offers a choice between good and bad. The more likely choice is between bad and worse. This is the choice that Americans face today, and they have to make it right.
Making the right choice requires taking stock of what is out there. The choice is not going to be easy. The only point on which both sides agree is that Social Security and Medicare should be off-limits in budget talks. There is no agreement on everything else.
The Democrats refuse to negotiate the debt limit and budget cuts jointly. They demand that the Republicans must vote on the debt unconditionally. They also insist that all other matters should be negotiated separately AFTER increasing the debt limit. Their main proposal for reducing future deficits includes tax increases on the wealthy and big corporations. They also propose to reduce spending on healthcare by giving more power to Medicare to negotiate prescription drug prices.
The main demand of the Republicans is that fiscal matters and the debt issue should be negotiated jointly, not separately. The Republicans also want to put caps on discretionary federal spending, roll back the Democrats’ climate agenda, and abandon attempts to cancel the debt on student loans.
So, whose plan is better? First of all, there is one difference that may not be all that important, but it is significant. The Democratic plan will reduce future deficits by three trillion dollars; the reduction under the Republican plan will be five trillion dollars. Two trillion dollars may not be a lot, but it is certainly nothing to sneeze on.
There is definitely more to the differences between the two plans. Our economy is in a recession, if not a depression. We have to work our way out of this situation. The main problem we face is growth. We have to grow out of this mess by creating new wealth. By increasing taxes on the wealthy and corporations, we definitely reduce their capacity to make investments. How can we grow and increase wealth if we do not invest? Moreover, investments should come from those who know how to create wealth. The government only knows how to redistribute wealth, not how to create it.
The Democratic strategy for negotiating the debt and budget cuts separately should be a non-starter. The Republicans will be stupid to accept this strategy. Debt is their trump (pun unintended) card in negotiating the budget. If they vote on the debt separately, they give up this card and untie the hands of the Democrats in negotiating budget reductions. They will, in essence, give the Democrats the gun that the latter can then hold to their head.
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Gennady Shkliarevsky is Professor Emeritus of history at Bard College.
If Traitor Joe doesn’t take the Republican deal There will be no increases at all and the Executive Branch will be shutdown. Almost all Executive Branch employees will be forced on furlough and less than half will be rehired. That will be followed by Traitor Joe’s Impeachment. Without Deep State Bureaucrats and a Traitor in the White House the Economy… Read more »
Who is going to do anything about it…. Just wait , we hear today that he is coming for the rest of our appliances in our house. Waiting for car edicts next or food…. They are loosing they know it and they WILL burn it ALL down they do not care. The budget battle in the next month is the… Read more »
Sadly, you have a point. We are at a critical stage. We have to do what we can to prevent this from happening. Whether we win or lose will depend in our will and skills. The rest is in God’s hands.
Corrupt DC forces lots of unrelated things in bills, to fool the public, but they want to exclude spending matters from this bill. Neither plan reduces the deficit. Both increase the deficit, the dems want no restraints. When DC says something reduces, they are lying, it actually reduces the rate of increase. The dem plan is awful the GOP plan… Read more »
I agree. I’ll take mediocre over awful any time.
A well thought out, reasoned look at what appears to be a confused issue for too many Americans.
Are there still enough Americans with common sense and the ability to reason to stop the destruction of a UNITED States of America?
I believe in America and Americans.