Tuesday, August 02, 2011

And The Delicious White House Fact Sheet on the Deficit Compromise!



I shed many bitter giggles while reading it. (Do you like that sentence? I chose it because it's sorta like American politics. Illogical but one is expected to ignore that.)

Have a look at some of the wonderful news in it:
Reduces Domestic Discretionary Spending to the Lowest Level Since Eisenhower: These discretionary caps will put us on track to reduce non-defense discretionary spending to its lowest level since Dwight Eisenhower was President. 
Back to the 1950s, in other words. Exactly what all voters desire.

Then there is this:

1. REMOVING UNCERTAINTY TO SUPPORT THE AMERICAN ECONOMY

• Deal Removes Cloud of Uncertainty Until 2013, Eliminating Key Headwind on the Economy: Independent analysts, economists, and ratings agencies have all made clear that a short-term debt limit increase would create unacceptable economic uncertainty by risking default again within only a matter of months and as S&P stated, increase the chance of a downgrade. By ensuring a debt limit increase of at least $2.1 trillion, this deal removes the specter of default, providing important certainty to our economy at a fragile moment.
 
It's not the statement itself which fed my nasty humor side, but the way we all accept that firms must NOT face uncertainty, despite the economic explanation why entrepreneurs make profits: Because they bear the risk!

But note that decreasing the uncertainty faced by those who are, after all, supposed to be compensated for the risk will transfer the risk to the shoulders of others: Those among the frail and the poor who lose essential public programs, those who no longer know if Social Security and Medicare will be there for them when they grow old. The increased uncertainty for these groups is of no importance.

And finally, there is this:
5. A BALANCED DEAL CONSISTENT WITH THE PRESIDENT’S COMMITMENT TO SHARED SACRIFICE

• The Deal Sets the Stage for Balanced Deficit Reduction, Consistent with the President’s Values: The deal is designed to achieve balanced deficit reduction, consistent with the values the President articulated in his April Fiscal Framework. The discretionary savings are spread between both domestic and defense spending. And the President will demand that the Committee pursue a balanced deficit reduction package, where any entitlement reforms are coupled with revenue-raising tax reform that asks for the most fortunate Americans to sacrifice.

• The Enforcement Mechanism Complements the Forcing Event Already In Law – the Expiration of the Bush Tax Cuts – To Create Pressure for a Balanced Deal: The Bush tax cuts expire as of 1/1/2013, the same date that the spending sequester would go into effect. These two events together will force balanced deficit reduction. Absent a balanced deal, it would enable the President to use his veto pen to ensure nearly $1 trillion in additional deficit reduction by not extending the high-income tax cuts.

A shared sacrifice has developed a truly bizarre meaning here. While some groups of Americans will face real hardship (and job losses), other groups don't get their tax cuts extended. Perhaps that is a shared sacrifice, but it certainly is not a fair division of the sacrifice.