The Budget and deficit..arghhh.

That last weeks have demonstrated how dysfunctional our system of government really is. On one side, we have politicians who believe that to relieve the crisis we must reduce spending and increase revenues and reduce the deficit by $4T in 12 years. On the other side, there is a group who believe that we should reduce spending only, this will give us a balanced budget in..er...76 years. According to the GOP talking points, the time for compromise has ended. Today when asked, the GOP Whip said that a 'clean' bill to increase debt ceiling is a non-starter and will never pass the House. What the GOP wants to do is attach riders to the bill which add more spending cuts, which in my opinion is something best left to the FY2012 budgetary process. To hold the increase of the debt ceiling hostage, without any hope for compromise is a recipe for financial disaster, not only for this country, but the world financial communities as well.

I find it ironic that the GOP has pointed out that the President is not following to the letter the recommendations of the Debt Reduction Commission. This commission was created by executive order by the President after the vote in the Senate failed because the 7 GOP Senators who CO-SPONSORED the bill voted against their own bill when the President came out in support of it.

Admittedly I am no economist, nor am I very smart, but it does not take a rocket scientist to reflect on actual history and facts to disprove the GOP assertion that tax cuts alone will resolve our jobs situation and reduce the deficit and debt. When Bush2 took office, he had a $273B budget SURPLUS from the previous administration. It took Mr. Clinton with a Republican Congress 6 years to balance the budget. Enter Bush2. What did he do? First was to slash the tax rates for the wealthy, why? Who knows. Everything was chugging along just fine. Job creation slowed by 60% after we had been told that if we reduce taxes on millionaires and billionaires, more jobs would be created. The fact that 22 million jobs had been created the previous 8 years seems to have been ignored. To be fair to Bush2, we did have 9/11 which lead to the war in Afghanistan. Of course, if he had had that $273B in the kitty, the financial hit would not have been so bad. In fact, the unfunded Part D Medicare would have been covered as well. In reality, had the tax cuts not been in place, Bush2 could have funded Afghanistan, Part D, Katrina, Iraq and all the extra Federal shopping which took place under his administration. The budget surplus over his 8 years was projected to be...$4T if he had left well enough alone. The the recession hit and we had nothing left in the kitty to fund TARP and the programs Mr. Obama was able to push through Congress, against the party of NO. So we increased the debt and deficit again. Now we face a $14T deficit, equaling our GDP. Unfortunately it was necessary for the government to step in to stop the recession in it's tracks. The result is an uneven recovery. Wall Street has recovered to pre-recession levels. Corporations have $2T in the bank. While unemployment has dropped significantly, it is still not enough to make up for the lost revenue through payroll taxes. People who don't work, don't pay taxes.

To put things in perspective...if we shut down the government, I mean..everything..it would take 9 years to pay off the debt with the current receipts. Does anyone know what $14T is? It's 14,000 billion dollars! So when the GOP 'negotiated' the the $70+B deal with the White House, it points out how insignificant those cuts really are.

Many Tea Party talking heads want to do just that. Shut the whole thing down. Maybe we should let them, for say a week. Let the American people see exactly what it would be like to have no government, no government services at all. Then they can see exactly how extreme the right wing is.

The GOP say's they want to revamp the tax code to get rid of the loopholes. Well, unless they toss the entire code and come up with a minimum tax for all corporations, say 20% which is only 3% more than the average effective rate, they will be wasting their time. You cannot say that they will go through every loophole and pull it without lobbyist interference is practical nor desirable. The good thing about the flat tax on business is that small business will get a tax break, big business will finally be paying something.

Bring back the standard taxes for the wealthy, its only a 2-3% increase...tiny by comparison.

But what do I know?