The nation is facing a debt crisis of historic proportions, but nothing will be done because Obama already has launched his presidential campaign. A compromise must included serious changes to unsustainable entitlements which are swamping the Treasury. Yet Obama took any significant changes off the table yesterday, by channeling Alan Grayson's charge that Republicans want people to die quickly.
By contrast, Obama's plan to raise taxes on the top 2% will not make a dent in the problem, even assuming the static analysis of $700 billion in additional revenue over 10 years. That 10-year number doesn't even close the budget deficit for this year. And of course, life is not static, and the projected revenue does not take into account changes in behaviour to avoid taxes, what I've termed the revolt of the kulaks.
As The Wall Street Journal points out:
According to Internal Revenue Service data, the entire taxable income of everyone earning over $100,000 in 2008 was about $1.582 trillion. Even if all these Americans—most of whom are far from wealthy—were taxed at 100%, it wouldn't cover Mr. Obama's deficit for this year.The truth is that Obama doesn't care about the deficit. Obama proposed a budget not long ago which would have increased spending and the deficit. It was only after the recent showdown over last year's budget that Obama decided that politically he needed to appear to be attentive.
Yesterday's speech was a calculated move by someone who doesn't care about the deficit to pretend to care so that he could use the issue in political hand-to-hand combat.
If you don't think 2012 is the make-or-break political year for this country, then you haven't been paying attention.
Update: Ramesh Pannuru does a good job debunking myths about the Ryan plan, and Jim Geraghty has a good post, Obama’s Habit of Trashing His Invited Guests.
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