Guts? Nerve? Daring? Fortitude? Backbone?

Sometimes you just have to take a stand and fight back.

Criticism has rained down on President Obama for giving the Republicans what they want. Obama has explained that compromise gives each side something they want and something that they have to give up that they don't want. This was the tax cut compromise. Obama said that he did not want to play politics with the lives of people that need help now, especially the 2,000,000 that are currently unemployed and need their unemployment benefits to exist. But Republicans were willing to play chicken and the President blinked first. Could a stand alone unemployment benefit bill have passed? Would Republicans vote no to such a bill? The answer to that is "yes". And then the political game would be on. Republicans could claim that the benefits were not paid for and that it perpetuated laziness and a welfare state. Democrats could claim that the Republicans were heartless and only seemed to worry about programs costs and how it would be paid for when it is not a program they favored. The tax cuts for the wealthy certainly aren't paid for. The tax cuts for the wealthy add billions of dollars to the deficit and consequently the national debt. Why don't those have to be paid for?

Obama said that not agreeing to the tax cut plan would raise taxes on the middle class. This would have a negative impact on the spending power of both the unemployed and the middle class and therefore a big impact on the economy and the recovery effort. But this would decrease the take home pay of working Americans only slightly and would raise billions of dollars from the wealthy as their tax cut would expire too. This would bring in billions to the US Treasury and therefore curtail the amount of the deficit and consequently the national debt.

What to do? What to do?

Many Democrats feel that Obama gave up too much. The wealthy gain big time with the tax cut for them. The middle class would pay higher taxes, but not to the point of making major changes to their life style. The biggest stumbling block is the unemployed. So was the deal for those 2,000,000? If you are one of them, you see that your lifeline is extended for a while and that is a great thing. So, what is the best thing for the US regardless of politics?

In the short term, the tax deal helps a lot of people and is a good thing. In the long run, maybe not. If US revenue increases, the deficit can be cut. Combine that with a supposed end to earmarks (supposed), and a major change in deficit spending could take place--a good thing. In reality the tax rates would just go back to what they were during the Clinton administration. You might remember those times. We weren't involved in any war, the unemployment rate was at record lows, and (gasp!) we actually ran a surplus instead of a deficit. IF Democrats could have found the nerve to stop the tax deal, could they have put the Republicans on the spot repeatedly by forcing votes that the Republicans said they would block without the tax cut for the wealthy? What would happen if every day a vote was defeated or blocked by Republicans on any issue that would be perceived as helpful to the US in the long run? Would the Republicans have the fortitude to continue and continue to block everything?

We won't know now, will we?

LET'S GO FORWARD BACKWARDS

Running on campaigns that promised job creation, at least two Republican governors elect have decided that the way to do that is to reject jobs that were created by Democrats. Both governors in Ohio and Wisconsin have rejected the high speed rail money that has already been awarded to their states. Let's examine Wisconsin's governor elect Scott Walker who campaigned on the promise that he would stop all progress on development of a high speed train between Milwaukee and Madison. This would eventually link up with existing train service between Milwaukee and Chicago and would also provide the basis for high speed trains continuing on to Minneapolis-St Paul. Sure enough, as he won election, he got outgoing Governor, Jim Doyle, to stop any additional work on the high speed train project. Governor Doyle not only supported the project, but had previously gotten a train manufacturer, Talgo Inc, to locate in Milwaukee and they had hired employees and were actively building train cars!

Walker originally wanted to divert the $810,000,000 that Wisconsin had been awarded to road building, but found out that this money was approved by Congress for high speed trains only. The US Transportation department indicated that if Wisconsin (and Ohio) did not want their share of this money, that it would be distributed to other states that did. And, other states immediately indicated that they wanted the money from these two states, totaling $1,200,000,000.

Walker said that the state would be on the hook for maintenance costs and he did not want to burden Wisconsin taxpayers with that extra cost, which he put at $7.5 million a year. That ignored the fact that the federal government currently picks up 90% of the maintenance costs on the existing service between Milwaukee and Chicago which would leave Wisconsin responsible for only $750,000. Now since it was reported that nearly 5,000 jobs would be created in building new tracks and upgrading existing tracks over several years and that there would be about 100+ permanent jobs running trains, stations, and other railroad duties, doesn't that mean that "I'll create jobs" Scott Walker is immediately losing jobs? Plus, some communities saw that a new train station and/or new train service in their towns would mean new development around that new traffic that would mean possibly new businesses locating near this new transportation, in the form of offices, restaurants, and shops. Then we have Talgo Inc. who just this morning announced that they would leave Wisconsin for a more train friendly state and take their 100-200 jobs with them. Illinois, which is planning to build a high speed train line between Chicago and St Louis, is interested in the company moving to their state. Wouldn't all these jobs have people paying taxes to Wisconsin? Isn't it possible that revenue would offset the $750,000 cost of maintenance for the state? Walker has said that he is going to create 250,000 new jobs in Wisconsin. Since he is starting at a minus 5000, he'll need to create 255,00 jobs to reach his goal. After going backwards, maybe we can start going forward. Hopefully Scott Walker knows the right direction.

"What the hell is going on out there!" -Lombardi

MAJOR CLARIFICATION

The big tax compromise.

Here is what happened, in clear terms. President Obama was faced with having tax rates for those making under $250,000 go up along with the rates for those making more (much more) as the tax cuts put in place temporarily by President Bush were due to expire December 31, 2010. At the same time, tax breaks put in by Obama for college tuition and small businesses were set to expire as well. At the same time unemployment benefits for about 2,000,000 unemployed Americans were set to end December 1st, 2010. Obama wanted to keep the tax cut for less than $250,000 earners and eliminate the tax cut for wealthy Americans (over $250,000). He wanted to extend unemployment benefits as for most those 2 million people that was the only income they had. That was what was keeping food on their table and a place to live. Republicans in the House and Senate insisted on keeping the tax cuts for everyone (meaning the rich, since everyone agreed to keep them for the middle class). The Republicans said that basically this was a must if anything was going to pass. Obama gave up 2 years of tax cuts for the wealthy to get the other things he wanted. That was the compromise. Many Obama supporters and many Democrats felt that Obama caved. This is not true. He got what he could under the circumstances. He could have fought with the Republicans and played chicken to see who would blink first, but that could take months and would mean the 2 million needing immediate help would not get it while the politicians played. He was not willing to do that. So, the rich get theirs (which is a lot) and Obama saved a lot of people who probably don't even know it and who probably voted Republican.

So what is the big deal about the wealthy getting a tax break?

One estimate is that with the tax cuts being extended to include wealthy folks, is that they will reap a $46,000 tax savings for each one million dollars of income. If you make $10, 000, 000, you can multiply that by 10 for about a half million dollars of extra money due to this tax break supplied by Republicans. Estimates also put this at a total of $60,000,000,000 that the US Treasury will not have coming in. These are the same Republicans that said that they could not in good conscious extend unemployment benefits since the Democrats did not figure out how to pay for that extension. They did not seem to worry about where the money would come from to pay for the tax cut for the wealthy.

What is the impact on the economy by these moves?

The people getting the unemployment benefits will spend that money immediately, putting that money into the economy immediately. The rich, it was pointed out by a Republican, will have the money to buy a nice, new car. (if they want a new one) or to invest in securities that could be eventually lent out to someone wanting to buy a house. The first of these grows the economy from the ground up. The second, seems to be along the lines of trickle down economics.

Why would the Republicans want to reward the rich? The Republican party blew away the records for bringing in donations for their candidates. The largest amount came in the form of unidentified contributors to third party organizations that sprang up overnight and did not have to follow any reporting rules as to who gave or how much they gave to these groups. You saw these groups this past election season pushing attack ads. They got life as the Supreme Court ruled this past summer that campaign finance laws set up to regulate these groups were illegal.

The best government money can buy.