| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

Follow Finfacts on Twitter

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

Analysis/Comment Last Updated: Jul 13, 2011 - 9:03 AM


Dr. Peter Morici: US budget deficit; Republicans need new taxes, President Obama does not
By Professor Peter Morici
Jul 12, 2011 - 1:07 AM

Email this article
 Printer friendly page
President Barack Obama responds to a question during a news conference in the James S. Brady Press Briefing Room of the White House on the status of efforts to find a balanced approach to the debt limit and deficit reduction, July 11, 2011.

Dr. Peter Morici: US budget deficit; President Obama hardly needs more taxes to slash the federal deficit but Congressional Republicans do need new taxes to survive politically.

Puzzled? Be not!

Washington is a city of paradoxes, where economics may define what is good but politics defines virtue.

Since 2007, when Democrats took control of Congress, federal spending is up $1.1trn--$900bn more than was needed for inflation. The federal deficit has jumped from $161bn to $1.6trn.

Surely, President Obama could cut the additional spending in half, and save the country $450bn each year and $4.5trn over 10 years. Congressman Paul Ryan is right—the county has a spending problem, not a taxing problem.

Republicans took control of the House in the last election on a cut federal spending and deficit platform. Americans were disgusted with the President’s bailouts of banks and auto companies, and Democrats big spending, and they want an adjustment to the center—perhaps the center right-- but Republicans don’t have a mandate to impose a severe conservative agenda.

The Tea Party remains a minority of House members, and the Republicans must strike a balance between fiscal austerity and voters aspirations on health care and the like to create a sustainable majority.

The strongest evidence I can cite is that the President’s approval ratings have improved through these budget negotiations, even as economic news gets darker and darker. In daily tracking policies, since June 20, his approval rating has improved and the ratio of approve-disapproval has gone from negative to positive.

Americans may hold the President accountable for the bad economy and even worse jobs market, but they don’t hold much malice toward his position that some increased taxes—a contribution from the wealthy and closing abusive business deductions—has some merit.

Voters do vary on where they draw line in defining the wealth and tax abuse, but hardly any national politician can play a winning hand completely rebuking the President’s fairness argument.

Saturday evening, Speaker Boehner pronounced that a grand deal on deficit—slashing it by $4trn dollars over ten years—was not possible, because the President insists on higher taxes as part of the package. He was giving in to pressure from his right wing, led by Majority Leader Cantor.

The hard reality is that Cantor is politically tone deaf, Barack Obama is not—that explains why the former is a Congressman and the latter is a President, and the 2012 elections are not like to change that.

Just as President Obama and Speak Pelosi mistook their 2008 victory as a mandate for a hard left agenda and got shellacked in 2010, Cantor and company, with their severe conservative agenda, are taking Republicans down the same well trod path of hubris and defeat.

If the Republicans were smart, they would recognize giving the President some tax measures in a package that is overwhelmingly spending cuts is the best path politically.

Obama is playing it smart, Cantor is not!

Bachman Talks Debt Limit: Republican presidential candidate Michelle Bachman;

Peter Morici,

Professor, Robert H. Smith School of Business, University of Maryland,

College Park, MD 20742-1815,

703 549 4338 Phone

703 618 4338 Cell Phone

pmorici@rhsmith.umd.edu

http://www.smith.umd.edu/lbpp/faculty/morici.html

http://www.smith.umd.edu/faculty/pmorici/cv_pmorici.htm

Related Articles
Related Articles


© Copyright 2011 by Finfacts.com

Top of Page

Analysis/Comment
Latest Headlines
Disastrous 44-year War on Drugs and ignoring the evidence
HSBC & Tax Evasion: France/ Belgium issued criminal charges; UK/ Ireland nothing
Analysis: Germany world's top surplus economy; UK tops deficit ranks
Facts do not always change minds - can even entrench misinformed
Finfacts changes from 2015
Facts of 2014: Guinness not Irish; 110 people own 35% of Russia's wealth
In defence of dissent and Ireland's nattering nabobs of negativism
Dreams of European Growth: France and Italy facing pre-euro economic problems
Globalization's new normal needs permanent underclass - Part 1
MH17 and Gaza: who is responsible?
Israel vs Palestine: Colonization set for major expansion
Aviva Ireland's 'fund' runs dry and life cover to die for
We wish Martin Shanahan - new IDA Ireland chief - well but...
Ireland as an Organised Hypocrisy is in lots of company
Dr Peter Morici: Friday’s US jobs report won’t alter Fed plans to raise interest rates
Own Goal: Could FIFA have picked worse World Cup hosts?
Ireland: Spin and spending will not save bewildered Coalition
Irish Government parties set for 2-year vote buying spending spree
European Parliament: Vote No. 1 for Diarmuid O'Flynn in Ireland South
Dr Peter Morici: US April jobs report may show 215,000 added in April
Dr Peter Morici: Hardly time to call Obamacare a success
Celtic Tiger RIP: Change in conservative Ireland six years after crash
Dr Peter Morici: Five things to know about the Fed’s obsession with inflation
In age of acronym/ Google, Trinity to rebrand as 'Trinity College, the University of Dublin’
Hoeness case part of ‘painful’ change for Swiss bankers
Dr Peter Morici: The Cold War was only on vacation
Dr Peter Morici: US economy drags on Obama's approval ratings; Don’t look for changes in Washington
Dr Peter Morici: Bitcoin debacle shatters the myth of virtual money
Dr Peter Morici: US Tax Reform: Eliminate the income tax and IRS altogether
Wealth threatens the simple life in Gstaad, Switzerland
Irish journalists get cash payouts over 'homophobic' defamation claim
Irish academics get lavish pension top-ups as private pensions struggle
Dr Peter Morici: Inequality is President Obama’s highest priority, but solutions are naive
The Finfacts Troika: Better times ahead and a hangover to forget?
Dr Peter Morici: Volcker Rule arrives with the hidden jewel in Dodd-Frank financial reforms
Ireland's toothless fiscal watchdog threatens to bark
Analysis: Germany's current account surplus - - Part 2
The end of western affluence?
Bono's hypocrisy on Africa, corporate tax avoidance in Ireland
France like Ireland is run for the benefit of the old