It should be obvious from these two extremes that what we really need is a system that is fluid while being disciplined, expansive without being prodigal, and one that employs a carrot along with the stick to move the U.S. back towards economic sanity. The trillion dollar question is: Does such a system exist?
Congress needs to finish its fiscal work successfully and quickly and then pass legislation that will stimulate job creation and growth and development of the economy for the middle class and the working poor.
I don't blame the president for compromising on the fiscal cliff, but the debt ceiling is a whole other matter. Given the severe consequences of a potential default, there is no end to what the GOP might demand.
Not only is this new cliff more dangerous, but we're also more likely to go over it. A deal would have been much more feasible for Fiscal Cliff 1 than Fiscal Cliff 2.
The major question now is, what is the shape of the debate to come? We believe the President and the Democrats' hands are strengthened, not weakened.
The White House and Senate have agreed to make the Bush tax cuts permanent for 99 percent of households, starving the federal government of funds. Even Mitt Romney could never have accomplished for the Republicans what Obama has just done for them. The Democrats in the Senate would have soundly rejected the plan if the Republicans had put it forward. There has been a special absurdity to the entire negotiating process, which has violated every standard of rationality and transparency. And meanwhile, the Federal Government is being dangerously weakened in its capacity to help America address the economic, environmental, and social challenges of the 21st century.
The U.S. Treasury Department has been taking contributions toward the national debt since 1961. The largest single donation, made in 1992, was $3.5 million. Most contributions have been under $100 dollars.
Getting a bipartisan agreement on the fiscal cliff puts us on the path to a better future and will allow us to focus on finding smart, pragmatic solutions to these other important issues.
Obama wanted to be the president who would change the tone in Washington, meaning a more collaborative relationship with the Republicans. That was not to be. The Republicans would not allow it.
If the deal is reached, the Republicans have won: they have locked in a federal tax system that collects so little total federal revenue that government can afford almost nothing aside from the military, interest payments, retirement programs and health care.
If the economy continues to grow, the president's second term will be a victory, period. That means the Republicans actually have to make sure it goes wrong. To accomplish this goal, the Republicans seem to have settled on two angles of attack.
They are terrified of being on record as having voted to raise taxes and their behavior indicates that they would prefer higher taxes and cuts to be triggered by virtue of their inaction, even if it plunges the economy into another recession.
We cannot tax cut our way to prosperity any more than we can tax and spend our way into fiscal nirvana. It requires a balanced approach of sensible spending cuts, substantive entitlement reforms and negotiated tax increases.
I thought I'd take the opportunity for a quick lesson in remedial math on small business taxes. Fact-based explanations reveal Speaker Boehner's math-challenged rhetoric for what it is -- nonsense.
Obama, mercifully, has given up the quest for a grand bargain that he never should have pursued in the first place. His current position -- let's just preserve the tax cuts on the bottom 98 percent and fight about the rest of the budget another day -- is exactly what it should have been all along.
In the political circus surrounding the fiscal cliff, we are missing the forest for the trees.