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Why The GOP Doesn’t Need a Last Minute Deal on the "Fiscal Cliff"

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Whoever invented the term “Fiscal cliff” should be forced to listen to it 500 times a day every day for the rest of his or her life like Chinese Water Torture. It’s Fiscal BS.

The military budget needs slashing and as for entitlements, the new taxes will be very welcome. Meanwhile, the bond vigilantes are going to remain strangely non existent. We’re going to be dragging along the bottom economically with the tax hikes or without them. After all interest rates at zero have done nothing to help over the last five years. Our problems are structural first, and fiscally driven second. There’s only so much macro-economics can do.

But my view on the “Cliff” is not really why I’m penning this.

It’s because if I were the GOP I’d be happy to play along with the Tea Party right in the caucus and say no to a deal. They win either way. The Dems, despite their recent electoral victories, could, yet again, come up with some weaselly short-term compromise. But even if they don’t GOP will remain strong in one key respect. They control the House and it’s all they need to do what they do best – which is say no.  The Dems will call them out as spoilers but the GOP will still control the House after 2014, because it’s gerrymandered out of Democratic reach and far less susceptible to the demographic time bomb hitting the GOP nationally.

I’d go even further than that. In some respects holding the Presidency and Senate are hassles the GOP can do without. They know that what they really want to achieve would cause uproar among the public – so why bother being proactive about it? You don’t have to run the show to starve the beast. You just have to make the place ungovernable.  The GOP have become a meta-party that governs by not governing.

So perhaps the GOP strategy is this.  If taxes do rise, and we truly go over the “Cliff” ( I don’t think we will suffer in any meaningful way but that’s beside the point ), the GOP can say “we tried to stop it, but the Dems pushed as over the edge”.  In other words, the GOP want us to go over, and they want the economy to fall further, so they’re ready to pick up the pieces with their lunacy.

The nightmare scenario for the GOP is that we go over the “Cliff” and not much happens except we balance the books, hit the rich where it hurts, and increase pressure for serious tax reform.

I believe that’s what the President is banking on.


Written by coolrebel

December 29, 2012 at 6:31 pm

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