Tuesday, December 11, 2012

Cliff Dwellings

A few years ago I visited New Mexico and had the opportunity to see some of the historic cliff dwellings that the Pueblo Indians carved into the side of steep cliffs.  These cliff dwellings are not only beautiful but also speak volumes about the ingenuity of human beings to adapt to their surroundings.

Bandelier National Monument
National Park Service
Photo Credit: Richard Hasbrouck

Fast forward to the fiscal cliff that is fast approaching at the end of the year.  What we are seeing right now in Washington is certainly not beautiful.  We are also not seeing much ingenuity.  We certainly do not seem to have evolved in the slightest based on what we are seeing.

The Pueblo Indians eventually had to abandon their elaborate cliff dwellings in northern New Mexico as drought forced the indians to relocate to areas nearer to the Rio Grande valley.  The parallels of history are interesting as we are on the cliff today not because of prolonged drought but because of prolonged deficits.   The indians didn't have enough water to continue to sustain themselves.  Today we don't have enough money to sustain ourselves.  Our well is as dry as it was for the Pueblo Indians in the late 16th century.  They had to change, move and adapt.  We have little choice but to do the same.  We just can't seem to be able to do it.

I hate to keep dwelling on the cliff but I can't help myself.

  • President Obama's leadership on this issue has been atrocious.  His public proposal is laughable.  He wants to raise taxes $1.6 trillion and he has offered the grand sum of $400 billion in spending cuts.  $4 in taxes for every $1 in spending cuts? This is balanced?   In my view, he has the ratio right he just has the numbers reversed. How about $4 in spending cuts for every $1 in taxes?

  • Speaker Boehner is in an unenviable position from all accounts.  He is in a tough position to begin with but he has made it much worse with the way he has handled the cliff negotiations.  In light of the fact that he needs to deliver a couple hundred votes to whatever plan he agrees to with the President,  I think he has made an enormous mistake in not putting forth some clear principles and made it public.  For example, he should have said that for any revenue increase there needs to be $4 of spending cuts.  I think he should have also been putting plans up for votes by the House that his caucus would support and sent the legislation to the Senate.  Make it clear to the American people it is the Senate and President Obama who are not putting anything on the table.  

  • If the best deal the Republicans can put together is the proposal they sent to the President that they are willing to accept $800 billion of tax increases for $600 billion of spending cuts, they might as well do nothing.  That is merely going to anger their base for nothing. I have long supported a tax increase (including a rate increase) as a bargaining chip. However, I would not agree to any tax increase without spending cuts of at least $3 for every $1 of revenue ( I would have started at 4:1).

  • I think that John Boehner is going to have a hard time retaining his position as Speaker based on how this is playing out right now.  I know that John Boehner is a responsible person who is trying to do what is right.  However, at this point, the man has not been equal to the moment.  I hope he can strike a deal for the good of the country that is truly balanced and can result in meaningful spending restraints.

  • I continue to believe that Barack Obama has the most to lose long term from any failure to get our fiscal house in order.  We are heading for a day of reckoning.  When that day comes people are not going to blame John Boehner or Mitch McConnell.  He is the quarterback.  Ask Mark Sanchez how that works.

  • No one wants to lead on the fiscal cliff negotiations because no one (with the notable exception of Paul Ryan) has tried to tell the American people the truth.  As a result, you see these types of poll results.  It basically comes to this.  We need to do something about the deficit but don't tax or take any government goodies from me, take it from thee.  Tax the rich.  Tax large corporations.  Cut Medicare for the rich.  The one thing that people say they would accept is cutting government spending across the board.  In fact, that gets more support than taxing the rich.  

  • This underscores the fundamental problem we have in this country today.  Everybody thinks someone else is taking advantage of the system to their detriment.   On taxes, people thinking the rich are using loopholes to avoid paying their "fair share".  On spending, people know that everybody is getting something from the federal government and they are worried someone else is getting more than them.   Total reform of the tax system to eliminate all deductions and preferences and across the board spending cuts are the only solutions.  I wrote about my tax reform plan last August. It's time to put the public interest ahead of special interests.  Why isn't this the Republican plan and their main talking point?  
I am heading back to my cave dwelling now.

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