If this weren’t so terrible, it would be funny – Published on naked capitalism, by Yves Smith, Nov. 28, 2012.
The Administration is worried that there won’t be a fiscal cliff deal by year end. Per Bloomberg: … //
… Yves here. Given the Bowles visit with Obama, this means (as we’ve indicated from the get go) that Obama really has his ego invested in getting a deal done by year end.
In fact, NOT getting a deal done is far better for everyone except the uber rich. As Paul Krugman has stressed, going into 2013 with no deal in place is not a dramatic event, and would substantially weaken the Republican’s bargaining position as far as preserving tax breaks for the wealthy are concerned. And if the Administration wanted to preserve middle cut tax relief, like lower payroll taxes, it can make that retroactive to the start of 2013.
Letting the negotiations go into 2013 also increases the odds of preserving Social Security and Medicare in their current form, since they will not be affected at all by the automatic budget cuts that would kick in in the absence of a deal.
But Obama, through folks like Bowles who have media access, is putting out panic signals to pressure Congresscritters to get a deal, any deal, done by December 31. And he’s also trying to rally the middle class to petition Congress to implement austerity, when the experiments in Ireland, Latvia, Portugal, Spain, and Greece all have shown that it makes debt to GDP worse and increases unemployment while shredding social safety nets. In other words, as Lambert has put it, we are all supposed to demand Congress to have one kidney removed.
From the Financial Times:
Mr Obama sought to increase pressure on Republicans to give ground by launching a new social media campaign.
The move by Mr Obama heightened the political theatre surrounding the US budgetary stand-off, with little more than a month left before the American economy is hit by a mix of spending cuts and tax increases that could tip it back into recession.
“I’m asking Americans all across the country to make your voice heard,” Mr Obama said, suggesting emails, phone calls and the use of social media such as Facebook and a new Twitter hashtag called #My2k, a reference to the $2,000 tax increase per family that would occur if the US plunged over the fiscal cliff.
“I want to make sure everybody understands this debate is not just about numbers. It’s a set of major decisions that are going to affect millions of families all across this country in very significant ways,” Mr Obama said … //
… Obama won’t change course, but Congrescritters are a different story. If the powers that be insist on engaging in economic malpractice, they need to be reminded that the public is overwhelmingly opposed to cutting Social Security and Medicare.
Bowles Says Fiscal Cliff Deal Unlikely by End of Year, on Bloomberg, by Heidi Przybyla, Bov. 28, 2012;
Steuerboykott: Interview mit Rico Albrecht im Schweizer Fernsehen, 55.26 min, von WissensmanufakturNET am 2. März 2012 hochgeladen.