Recently, I testified before the House Oversight committee on the “risk corridors” in the (Obamacare) exchanges. Republicans claim that this is a device to bail out the insurance companies. Democrats, in the unusual position of defending the insurance companies, actually claimed that the government was going to make a “profit” because of it.
I’ve just spent a harrowing weekend reflecting on Thomas Paine’s Common Sense, the pamphlet that came out in January 1776 and turned the public toward seeking independence from Britain. I say harrowing because the distance between the ideals found in this pamphlet and those of today’s America is so vast as to be nearly unrecognizable.
Washington, D.C. – A tragedy is brewing in the United States. Within a decade, the country that has gone from the second freest in the world to the 17th. And the threat is much worse than the federal government’s current 20% shutdown.
If Congress does not increase the debt ceiling (as it has done more than 100 times since 1917), the government may default on its debt later this month.
This past Friday, President Obama signed the kind of law that makes everyone happy… an extension of the Bush-era tax cuts. It’s a deal Republicans like because it keeps income, dividend, and capital gains tax rates relatively low for another two years. While Democrats like it for its extension of unemployment benefits, reduction of Social Security payroll taxes, and extension of tax credits for children, college tuition, and a variety of other items.
US taxes will be increasing… it’s just a matter of time. In the clip below, from Jon Stewartâ€™s Daily Show, you can see his perspective on how taxes, or the lack of them, may play a role in strengthening the powerful federal deficit monster. Sure, its content is probably overly anti-Republican given both parties are a mess, but it’s still funny.
US fiscal policy has been out of whack for so long that both Democrats and Republicans share a part in the blame. But, for a recent column in the Financial Times Gideon Rachman focuses on the Republican role in debt creation. In particular, he looks at how Ronald Reagan’s strengths and weaknesses in office have evolved over time into a muddled mess of tax and spending strategy.
Despite the lack of any sustainable, long-term financing solution — and record debt levels — it seems one of the only thing Democrats and Republicans can consistently agree upon is more and more spending… whether through taxes or debt.
As Jesse Felder astutely points out, it’s a really unfortunate case of the pot calling the kettle black.