re: #75 blueraven

Yes, of course. The President asked for a clean debt ceiling vote and then to start serious negotiations to face the debt crisis. The GOP wanted to play politics and hold the economy hostage to their demands.

Meanwhile the President offers to meet them more than halfway and they walk away. All this time we should have been focused on jobs. But the shiny object was to bright for the GOP to ignore.

It could cost them dearly.

The president’s offer is that first the GOP vote a clean debt ceiling increase, and then——what? He has made many promises that he has not kept. Many ways of keeping any promise of “serious debt reduction talks” might well lead nowhere. A debt limit increase does not of itself solve our debt problems, because somewhere out there, and not that far from where we are, there is a soft debt limit that, as we hit it, our credit rating with the world boils away.

Some combination of tax increases that actually yield revenue increases, and cuts that actually cut, both of them in a major way, is going to be required.

Historically, the U.S. has never collected anything like 30% of GDP in taxes. The ceiling seems to be in the low 20’s. Right now we’re collecting below 20 and spending somewhere in the 30’s. Unless “This Time Is Different” is our game plan, we cannot expect any tax law changes to actually yield 30% + of the GPD for the federal govt. That means spending cuts will have to be very substantial.

[Actual yield: the yield the govt receives in the out years, after people have had a chance to adjust their tax planning to the new laws. For instance, if the law said all income above 100K was taxed at 100%, you’d get a lot this year, but none next year, from that provision.]