Supercommittee Fail

It’s official. The supercommittee has failed.

It wasn’t a bad idea really. The amount that the supercommittee was tasked with cutting — $1.2 trillion — was chosen quite specifically. It’s small enough to be doable. But big enough that you can’t do it with one policy. You can’t get $1.2 trillion just by raising taxes on the rich. You can’t get $1.2 trillion without hitting entitlements. You can’t get $1.2 trillion from cutting “waste”. Only a combined policy would match that number.

Granted, the amount was tiny in comparison to our massive budget. As Nick Gillespie pointed out, the amount of money involved was like arguing about floor mats in a $20,000 car. But any deal would have been a microcosm of the larger grand bargain needed to fix our budget.

Unfortunately, our political leadership were unable to complete even this simple and tiny task. Republicans didn’t want to raise taxes even a little and are, even now, trying to eviscerate the extremely modest cuts in defense spending. Democrats didn’t want to touch entitlements, even a little. And the idea of compromise is so alien to them that mixing policies was a non-starter, despite a tax-and-cut compromise polling in the 70’s among the public. Bainbridge:

The Republican idea that we can solve the debt problem without raising additional revenue is just absurd. We’ll never be able to cut federal spending down to the 14% of GDP that currently comes in as federal revenue. But the Democrat idea that we can just keep doling out entitlement programs like candy is even more flawed. We’ve got to get the size of government back down to around 20% of GDP and entitlement cuts have to be a big part of doing so. After all, Willie Sutton robbed banks because that’s where the money is. Well, entitlement programs and defense are where the federal government has its money, so that’s where you’ve got to look for cuts.

Ideally, all Americans would have skin in the game. Everybody ought to pay higher taxes and everybody ought to take a cut in benefits. We can sort out how progressive those changes ought to be, but everybody needs to have a stake in the success or failure of the American enterprise.

But don’t expect DC to get us there.

There are a few people crowing about this, but I can’t fathom why. All this does is kick the can down the road … again. Any serious deficit plan is going to have to be a compromise. Neither party has either the will or the power to get 100% of what they want while giving the other side 0%. We got into this with a combination of low revenues and high spending. And you can’t get out of it without addressing both. Nobody “won” by holding out. All the did was make the inevitable even more painful.

Update: Just to give you the numbers. The SC was tasked with finding $1.2 trillion in cuts … out of $44 trillion in planned spending.

Comments are closed.

  1. Mississippi Yankee

    The picture that Yahoo News chose for this story was a head shot of a sad John Kerry. You weren’t sure if you were looking at a horses face of it’s other end.
    Glad to see someone with a sense of humor in the LSM

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  2. Hal_10000 *

    You’d have thought just locking those guys in a room with Kerry woudl have produced an agreement. “PLease, let us out! We’ll do anything!”

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  3. Mississippi Yankee

    I know the mantra Kabuki Theater is growing old but did anyone ever expect a different outcome?

    Watch for another credit downgrade very soon. Maybe even before the threatened veto. (yanno cause of the automatic spending cuts)

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  4. Seattle Outcast

    A primary reason it failed (I mean, other than it was never intended to actually succeed) was that certified moron Patty Murray was a major part of it.

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  5. davidstvz

    If you believe Robert Wiedemer, author of Aftershock, it’s already too late anyway. Maybe the politicians know this and thus refuse to fall on their swords. Cowards. I used to believe the government debt was a magical source of money. Politicians couldn’t possibly be ringing it up to such massive amounts if they ever expected to pay it back. There must be some loophole in the system that I don’t know about.

    Well, I know what the loophole is now. Once it got to a certain size, they never planned to pay it back. You blow up the economy with massive borrowing until it starts to crash. Then you print money to try to stop the crash, but it only slows it down and eventually leads to high inflation. That’s where we are now: we printed the money now we’re waiting for inflation to hit (2013 to 2015). When it hits, interest rates go through the roof (interest rates have to beat inflation to make a loan worthwhile) so it becomes clear that government bonds are a bad investment and we can’t borrow anymore (neither can consumers). The US government collapses, the dollar collapses and life goes to hell. We get no more cheap goods from China (demand for the dollar would be low), unemployment goes way up, the government is forced to make massive cuts, print more money and raise taxes on the much smaller group of people who are working (to provide welfare for the huge amount of people who aren’t).

    Has anyone else read that book? I’m curious to know if I’m missing something. Is that how this huge government debt bubble ends?

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  6. AlexInCT

    The assumption that the democrats ever wanted this to actually result in anything but a failure – so Obama could then run on the whole “do-nothing congress’ talking point, which never points out the do-nothing comes from the democrat controlled senate – is false. They got exactly what they wanted from this: talking points so the campaigner-in-chief can spend the next 11 months fooling as many idiots as possible. BTW, watch them circumvent these mandated cuts – except for defense – come January with gimmickry and other slight of hands, and if the republicans go along, they are just as bad as the crooks on the left.

    BTW, that $1.2 trillion dollars was not a cut in spending of any kind. It was a reduction in future spending. That’s why anything that gives us taxes yesterday and cuts a decade from now, needs to immediately be a no-starter. The politicians, in both parties, have no vested interest in reducing their power & infuence, see Nancy Pelosi getting rich, becausea smaller government means a lot less power.

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