I was lost in my thoughts while running yesterday, when I suddenly realized that I had stopped dead-in-my-tracks. I found myself simply standing there, because I had just realized that the negotiations over the Fiscal Cliff have already proceeded farther than they did last year -- in only three days and without Obama & Boehner even meeting face-to-face.
Anybody who has ever been involved in difficult negotiations know that the conclusion must be win-win, especially in politics . . . or, for that matter, in anything involving a male ego. Both sides must be able to say they won!
Both parties want to trim entitlement spending. The Democrats want more revenue. The Republicans want to be true to Supply-side economics and keep the highest marginal tax rate low. They will both win by hiding in the complexity of the Internal Revenue Code (IRC).
In the end, the tax rate on high-income earners will be unchanged, even though they will, in fact, be paying more in taxes. That is because their deductions will be more limited and their access to entitlements will be more restricted. Remember: we can increase tax revenue without raising tax rates!
Unfortunately, it will take more than seven weeks to disguise this tilting of the tax burden toward high-income earners, and the deadline of year-end will have to be pushed back. Of course, the deal could always fall apart if either side over-plays their hand. (I'm talking about you, Mr. President!)
It is a brilliant, if inevitable, compromise. Obama wins. Boehner wins. More importantly, America wins! And, the deficit would finally begin falling. Thirteen years ago, investment advisors worried about America repaying its entire debt, leaving no U.S. Treasury bonds for us to buy for our clients. Thirteen years from now, we could be thinking the same thing again . . . it may not be probable, but it is possible!
I had almost given up on the American system of governance and have been speculating about what type of government comes after democracy fails. Prussian politician Otto von Bismark (1815-1898) once said that making laws is even more disgusting to watch than making sausage. The past few years in the U.S. Congress have been even more vile than Otto ever imagined . . . but maybe, just maybe . . . I've under-rated our American system of making laws.
Maybe, if I had more faith in our system of governance, I could remember to keep running?
Anybody who has ever been involved in difficult negotiations know that the conclusion must be win-win, especially in politics . . . or, for that matter, in anything involving a male ego. Both sides must be able to say they won!
Both parties want to trim entitlement spending. The Democrats want more revenue. The Republicans want to be true to Supply-side economics and keep the highest marginal tax rate low. They will both win by hiding in the complexity of the Internal Revenue Code (IRC).
In the end, the tax rate on high-income earners will be unchanged, even though they will, in fact, be paying more in taxes. That is because their deductions will be more limited and their access to entitlements will be more restricted. Remember: we can increase tax revenue without raising tax rates!
Unfortunately, it will take more than seven weeks to disguise this tilting of the tax burden toward high-income earners, and the deadline of year-end will have to be pushed back. Of course, the deal could always fall apart if either side over-plays their hand. (I'm talking about you, Mr. President!)
It is a brilliant, if inevitable, compromise. Obama wins. Boehner wins. More importantly, America wins! And, the deficit would finally begin falling. Thirteen years ago, investment advisors worried about America repaying its entire debt, leaving no U.S. Treasury bonds for us to buy for our clients. Thirteen years from now, we could be thinking the same thing again . . . it may not be probable, but it is possible!
I had almost given up on the American system of governance and have been speculating about what type of government comes after democracy fails. Prussian politician Otto von Bismark (1815-1898) once said that making laws is even more disgusting to watch than making sausage. The past few years in the U.S. Congress have been even more vile than Otto ever imagined . . . but maybe, just maybe . . . I've under-rated our American system of making laws.
Maybe, if I had more faith in our system of governance, I could remember to keep running?
