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Hullabaloo


Wednesday, November 28, 2012

 
If politicians wanted to solve real problems instead of phony ones ...

by digby

Celebrated silent film star and Huffington Post pundit C.A. Rotwang explains the foibles of the so-called fiscal cliff and properly defines the leftmost side of the current argument as centrist. This strikes me a particularly relevant:

I have just elaborated a serious, centrist view of the budget. Now you could argue that a centrist approach is necessitated by the political reality of the House of Representatives -- it is controlled by moonbats. But if you combine centrism and moonbattery, you get half of each, and who needs that? Obama's initial negotiating position is as cold as yesterday's mashed potatoes. Worse, support for Obama tends to morph into acceptance of his policies as a matter of principle, rather than the least-bad of available choices.


That is unfortunately, too true. Obama the alleged socialist has an amazing talent for making centrist policies the new liberal true north, which is the saddest political consequence. It's like swimming upstream.

But Rotwang offers up a different vision that is hardly ever spoken of:

What about a progressive view?

A progressive view starts with the recognition that the current tax system, with revenues of less than 16 percent of GDP, is appropriate to the Federal budget of the 1950s. At minimum we ought to be looking at getting the share of GDP back up to 21 percent, as in the Clinton years. Unfortunately, this will require Clinton-era tax rates on households below the current, more conservative Administration's (roll that around in your head for a second) fabled $250,000 a year income.

One of Obama's two original sins (the other being the celebrated "pivot" from Iraq to Afghanistan) was promising a slim revenue system. (With ACA he violated this pledge, since low-income persons will be required to buy health insurance, which the Supreme Court classifies as a tax, but I digress.)

The proper progressive object of higher taxes is higher social spending: public investment, aid to state and local governments, and expansion of social insurance. Remember the poor? Remember New Orleans? Remember Long Island and the Jersey shore?

On the spending side, rather than balanced spending cuts, the object is a transfer of resources from defense to not-defense. Here again the reductionist, arithmetic view is a distraction. The real question is not how to achieve some kind of "fair" cut out of defense. It is, what are we doing, and why? We are presently defending Europe from nobody, and defending the rich nations of South Korea and Japan from the impoverished nation of North Korea. We have an empire of bases dedicated not to defense but to meddling in the affairs of all the world. Now is the time for a peace dividend. An army of assassins to go after the truly deserving bad guys would be very cheap, compared to the current Pentagon money pit.

That's a progressive budget view. Support for the president's pragmatic, debatable negotiating tactics should not ratify fundamentally illiberal principles. There was a great candidate who talked a progressive game in 2008... oh wait.

Never mind.

I do cut Obama a little bit slack on the "revenue" side. Raising taxes on everyone would be counterproductive at this point in the economic cycle. Better to get some tip money from the rich and borrow cheap money for a while until the economy is rolling. (Of course, once that happens, the "it's your muneeee!" circus will be back in town.) But yes, there's no reason that the current low Bush tax rates should ever be written in stone by progressives. I say we just keep extending the middle class "cuts" until such time as they can expire without economic consequences. Once they're extended forever, it will be a huge lift to raise them again. And they do need to be higher at some point.


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