The Fix Is In

The GOP leadership is part of the problem and not part of the solution. That's why the Tea Party movement has grown so quickly.  They just don't seem to get it.  It seems like the charade this week was their "anger" over the deficit ceiling. It looks like the fix is in, and all that is happening is that the GOP will be able to say 'we won'...when America lost.

Over at Big Government.com, Andrew Breitbart's blog that cover's the government, they're reporting that that GOP has rolled on not raising the debt ceiling.  The GOP Leadership keeps on "going along to get along"...and they still are.

Here is a theory that many believe on Capitol Hill. The walk out by Senator Jon Kyl (R-Arizona) and Rep. Eric Cantor (R-Virginia) from the Vice President’s debt limit negotiations on Thursday was staged and agreed to by both parties as a means for Republicans to look tough before they cave on increasing the debt limit.

Vice President Biden has been meeting behind closed doors with a bipartisan bicameral group of politicians for weeks in an effort to cut a deal on a package to increase the statutory $14.3 trillion debt limit. These meeting have been extremely secretive and not many specifics of the negotiations have been provided to the public. One of the few details leaked was that liberals were putting tax increases on the table as a means to balance the budget.

If this is the case...then the GOP has done it again.  They've FUBAR'd in a way that will hurt the country immesurably.  What we need, isn't to raise the debt ceiling, but a significant roll back of government spending.  When the Demcrats took control, first of Congress in 2007, and then the White House in 2009, the increased federal spending by 40%.
 
What we need to do, isn't just window dressing spending cuts (which is what we've had this year), that are called "victories" by the GOP leadership, but a return to 2006 spending levels...and then reduce those across the board by 20%.  If we do that, we will see a significant shift in the economy from the wallowing we have now, to serious growth.
 
We won't see that of course, because the GOP leadership is more intent on "window dressing" than in actually delivering anything that can  shift the course of economic suicide that the Democrats has set us upon...at least until after the 2012 election...but even then, that will be too late for many people.
 
U6 unemployment is rising steadily (if "unexpectedly"), as will full unemployment.  With the EPA on course to put in place "carbon emission control" by executive-bureaucratic fiat, we'll see a sharp increase in energy prices, especially electricity and gas prices...
 
The GOP leadership seems intent on snatching defeat from the jaws of victory once more.

UPDATE:  From National  Review:  Here's what Kevin Williamson has to say, "How Much Credibility Does The GOP Have On Taxes"

I don’t want taxes or spending at 21.3 percent of GDP. I don’t want them at 18.5 percent, for that matter. I might go for spending at 14.2 percent and taxes at 16.1 percent as a good start, which would take us to the savage Darwinian conditions of . . . 1951, not exactly the Dark Ages or a time of notable national austerity. As I hear it, 1951 was a pretty good year. From 1950 to 1955, our average real GDP growth exceeded that magic 5 percent threshold that Tim Pawlenty and Larry Kudlow and the optimists are talking about, and that includes a little recession in 1954. (Granted, there are excellent reasons to believe that the postwar boom is not easily replicable. Here’s one. Here’s another. And one more. Not a unicorn in the bunch.)
But here’s the thing: If you want spend 21 percent, you really need to tax 21 percent. If you want to tax only 18.5 percent, you can only spend 18.5 percent. So far, Republicans have been pretty insistent about taxes, and not without reason (this probably is not the optimum moment to announce a large tax increase). But if you are not willing to move one variable, then you have to show yourself willing and able to move the other variable far enough to bring things into balance. The Republicans have been moving in the right direction, but they aren’t quite there. You want to take taxes off the table, then show me you can get the job done with cuts alone — not on paper, but in Congress.

Why haven’t I mentioned the Democrats? They control the Senate and the White House, holding a far stronger hand than do the Republicans. The reason is that the Democrats are a lost cause. Their commitment to maintaining the current path of entitlement spending and public-sector expansion will ensure national bankruptcy at virtually any level of taxation. (Don’t believe me? Have a gander at what a $30 trillion deficit looks like.) Removing Democrats from power probably is a precondition for averting a national fiscal meltdown. A necessary condition, but not a sufficient one.

The emphasis above is mine, not Kevin's.  He makes a good point.  If you want to spend level X, then you have to tax at level Y...or you spend your grand children's money...which we've been doing for 70 years.  When the Soviet Union did that...they went the way of the dinosaurs....maybe it's our turn to collapse as a nation.  That's not out of the question until we get spending into the realm of sanity. 

Jason C in the comments has this to say...and he does make some excellent points: 

Here is the problem with base year comparisons - we don't have the population structure we had in 1999, let alone in 1951.


In 1999, payroll contributions covered 80% of federal transfer payments for the big entitlements - social security, medicare, and medicaid. Payroll taxes brought in 7% of GPD and spending was 8.75% of GDP. Already out of balance, and accounting for most of the persistent deficit, but still in some reasonable relation to each other.

In 2010, payroll contributions covered only 63% of those transfers. Contributions brought in only 6.7% of GDP - down in yield, not up. Spending on them meanwhile ran %10.6% of GDP. There is a 4% of GDP structural gap between payroll contributions and transfer expenditures -and no it isn't being funded out of general revenue - there isn't any. It is all being borrowed.

Demographics push the federal government 0.2% of GDP further into the red every year. Every decade, government spending takes 2% more of GDP and payroll contributions bring in a marginally smaller share - because a smaller portion of the population are of working age, and a larger portion are in the receiving age categories, and are living longer and costing more each.

Similarly, all the means tested programs grow like topsy as people learn to get on them, regardless of economic growth or anything else. There are 50% more people on medicaid today than in 1999, for example. SSI today is as big as medicaid was then. Etc.

Just to balance this portion of the federal fiscal train wreck would require an immediate 58% increase in payroll taxes. Counting employer side, that would be a jump from 18.3% of gross pay to 29% - which amounts to a 13% fall in after tax payroll kept.

This would still leave the 0.2% demographic headwind; it only makes up for the past headwind not faced squarely or paid for. To deal with that remaining headwind, payroll tax *rates* would have to continue to climb by about 2% per year. This would consume essentially the entire increase in real wages we can expect from future productivity increases.

In other words, present Americans would need to drop their standard of living by about an eighth and sign away all future real increases in their income, to keep the present (frankly, certifiable) promises to give everyone a lavish retirement and free healthcare - which we have not remotely paid for.

We ought to offer the American people a clear choice between that path and Ryan's alternative. The present "let's pretend" path of borrowing huge shortfalls to cover the difference between what payroll taxes are collecting and what we are giving away on middle class entitlements, is not an option. It leads straight to national bankruptcy

Just take a look at the Greeks, they've had their 12 or 13th bailout, and are STILL going to founder, economically.  (follow the link and "read the whole thing.")

No one will be bailing us out...keep that in mind.