On Morning Joe today Mike Barnicle took over for Joe and Mika. The panel was very principled and decided to talk about the fiscal cliff rather than dwell on the salacious Petraeus affair -- has a ring to it, yes? I imagine they decided to give the Petraeus affair a rest because it's making Holder and Obama look bad as people think more about the stories being told about who knew what and when.
They brought in S.E. Cupp, Ed Rendel, Jefferey Sachs, Chuck Todd and David Gregory to talk about the fiscal cliff. Sachs said that Obama needs to develope a budget. Right now politicians are playing a game regarding tax hikes and whether the hikes will come from higher rates or elimination of loopholes and subsidies or capping the amount of tax deductions rich people can take. Sachs also pointed out that Obama's proposal to raise 1.6 trillion in revenues seems bold until you consider that this is over 10 years making the hike in revenues $160 billion a year. The deficit is $1 trillion a year. This leaves a deficit shortfall of $840 billion a year. Over 10 years this adds $8.4 trillion to the debt, increasing the total to close to $25 trillion. So much for bold. If we have a recovery and more revenues are collected then the total debt will be lower, but there's no recovery in sight with the state of our interventionist government killing small businesses.
The panel discussed the Big Business captains meeting with Obama today and how they want to pay more taxes to do their part dealing with this debt. Yeah, right. Large, rent-seeking corporations know that the tax hike Obama is pushing will not hurt them, but it will hurt their competitors nipping at their heels in the market. When statists of all stripes say raising the tax rate on families making over $250,000 will only affect 3% of small businesses they fail to mention that this 3% does most of the hiring. It's like taking GE and and 99 other small companies, then raising taxes to 80% on those making over 1 million and justifying it by saying it only affects 1% -- that would be GE which hires more, in our example, than the rest combined. If we look at the contribution to the economy made by 3% of small businesses who are the top earners and would be hit in tax hikes, the percentage of their contribution to the economy is much greater than 3% compared to the individuals making up the remaining 97%. If this 3% of the top earners and producers among small businesses starts firing people, less revenues will come to government, and government will have to pay out more in unemployment beneifts and food stamps.
Sachs is right. Instead of playing political games, the President, who runs around the country talking about a balanced approach to dealing with the fiscal problem, should lay out what he sees as a balanced approach then let the House and Senate work it out, But so far neither the Senate nor the President have been willing to committ to a plan. No one wants to committ to any targeted spending cuts. The President presented two phony budgets to the Senate which got zero votes. It's a sham. Grownups, serious men and women, would sit down and come up with a budget, but there are obviously very few serious men and women in DC. Their main focus is how to take more money from the private sector. Let's be clear about this. Behind all the talk about being responsible, being bold, creating a balanced approach, the politicians in DC are spending insanely and desperately looking for ways to force taxpayers to pay down the spending so they can continue spending insanely. What's really insane is that voters approved of the party that has doubled the debt and didn't put together a budget in four years. But if history is any guide, what's more insane is if Republicans had gained power, nothing much would have changed except on what the money is spent. We're running out of time -- we've already run out money -- years ago.