Even with hugely higher taxes we’ll still be marching toward default — and the military cuts will make war more likely.
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I hate to say this, because many of the Bush tax cutters are pals and colleagues, but those Bush 43 tax cuts, well intentioned by well intentioned men and women, have just thrown us into a deep and damp ditch, and Obama’s spending has compounded the felony— and getting out will be a struggle.
This doesn’t even address the effect all of this federal de-stimulus (I made up that phrase!) will have on the macro economy. Will it push us back into recession? We don’t know. We have a very large economy and we do not really know if raising taxes hurts or helps. When the Congressional Budget Office says the “fiscal cliff” will cut some amount they calculate to one tenth of a percentage point off the growth of the economy, they are making a calculation that simply cannot be made. It is just child’s play. The effects of economic events are extremely difficult to measure, and their magnitudes are impossible to measure in advance or even in retrospect. There are, as Hayek said, just too many different factors operating at once to say which factor had which effect and how much it was.
In the meantime, there is a lesson here for policy makers: do not embark upon large fiscal policy ventures without having some idea of the effects. This goes for tax rises, tax cuts, and above all, for defense cuts. It would be sad if the “fiscal cliff” pushed us into recession. It would be a catastrophe if it led to war for which we were ill prepared.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
Was the President done in by the economy, or by the politics of the economy?