Debt Deal Winners and Losers

If you're like me, you heard a lot about the 'Debt Ceiling Deal', both before and after it was made.  The Democrats, led by President Obama, wanted over a trillion dollars in tax increases, the Republicans wanted no tax increases and more spending cuts, and there were all sorts of negotiations to determine how it would all go down.  At one point, the President had Boehner agreeing to 800 billion in tax hikes, but his insistence on an extra 400 billion, boosting the total tax tally to 1.2 trillion, cost him the entire agreement, and in the end, there were no tax hikes at all in what ultimately was agreed to. 

However, what many people likely dont realize is, there weren't any actual spending cuts either.  What they're calling spending cuts are actually just them agreeing to raise spending slightly less than they already planned to.  Imagine for a moment you spent 1000 dollars at your favorite restaurant last year, but this year you had some extra bills to pay and you needed to save some money to make sure you had enough money to cover them.  Therefore you decide spend less at your favorite restaurant, you'll only spend.....1800 this year, instead of the 2000 you planned to spend.  Normal folks call that a major spending increase, but in Washington they'd call that a big cut.  Thats what the Washington politicians did with this 'Debt Ceiling Deal', they all agreed to spend WAY more money, and incur WAY more debt, and call it a big spending cut! 

Certainly from a purely political standpoint, the Republicans and the Tea Party were really big winners, because they got their pretend spending cuts without any tax increases, and because it does at least slightly lower what Washington 'would' have spent over the next 10 years.  They totally outnegotiated Obama and the Washington Democrats, and for that they get to claim the big win.  However ultimately this deal gave the President the authority to defecit spend over 2 TRILLION more dollars on top of the trillions he had already defecit-spent, which will of course hurt the economy further.  Folks in Washington always look at things completely backward, they say 'If you cut spending, it'll hurt the economy', when in reality Washington over-spending is hurting the economy, and the more you cut the spending, the better the economy will be.  The less money there is in Washington, and the more money there is in the free market, the more the economy will grow. 

So ultimately from a political standpoint, the GOP won, the Tea Party won, and Obama and the Washington Democrats lost.  But the biggest losers are the American People, who will now have  to suffer from a weaker economy and over 2 trillion dollars in more debt.  There is now serious talk of a possible 'Double Dip' Recession coming, and of course the liberals will once again say that means we need more Washington spending to fix it.  In reality, you can't solve the problem of being drunk by drinking more, and you can't solve the problem of over-spending by spending more.  We need to cut spending and balance to budget, if we do that the economy will no doubt recover in a big way!  Here's hoping that Washington figures that out, and soon.      

Obama worst Presidential negotiator ever?

It's ironic, that the man who became President because of his incredible speaking ability, who overcame a complete lack of experience or ability by the sheer power of his speeches, is quite possibly the worst negotiator in the history of the Presidency.  There was some evidence this could happen even before he was elected, let's remember back to the Primaries of 2008.  Obama won Iowa, Hillary won New Hampshire, and eventually John Edwards withdrew from the race leaving it just down to the two of them to decide the nominee.  It seemed that if Obama could get that Edwards endorsement, it could put the race away.  A grand meeting was scheduled, at the home of John and Elizabeth Edwards, and Obama made the trip to snag that major endorsement.  Only it didn't happen.  While they wanted to support Obama over Hillary, there was a minor problem in that Elizabeth favored the 'individual mandate' form of socialized medicine, while at the time Obama was campaigning against that idea.  Of course as we all know Obama eventually passed just such a law, but at the time he was adamantly opposed to it, so much so that he actually got into an argument with Elizabeth Edwards over the issue!  His inability to handle that disagreement ultimately cost him the Edwards endorsement, and as we all know the Primary eventually became one of the longest, most dragged out primaries of modern times.  In the end it didn't matter, Obama still won and Edwards ended up being a criminal, so it all worked out for the best for him, but the fact remains that he blew a huge, easy to get endorsement, because of his complete lack of negotiation skills.

Fast forward to these 'Debt Ceiling' negotiations.  John Boehner and the House Republicans pass 'Cut Cap and Balance', a bill that was overwhelmingly popular with roughly 2/3 of Americans supporting it according to the polling.  They had a winning hand, but instead of playing it they chose to enter negotiations with the White House.  In those negotiations, John Boehner agreed to 800 billion dollars in increased taxes, major tax increases in a time of economic distress.  However, for some strange reason Obama wasn't satisfied with that, and suddenly demanded 1.2 Trillion in tax hikes instead!  Demanding an extra 400 billion dollars in tax increases resulted in the seemingly spineless John Boehner suddenly (and temporarily) growing a set, and ending all negotations with the White House, and in the process walking out on the 800 billion dollar tax hike he had already agreed to.  Obama had won, he had obtained the huge tax hike he wanted, he could've made John Boehner look like a tax-and-spend Democrat, he had pretty much everything he wanted, and he somehow found a way to blow it bigtime.  Now all signs point to Boehner and Harry Reid eventually doing a deal involving NO tax increase whatsoever!  An incredible turn of events thanks to an even more incredible blunder, snatching defeat from the jaws of victory, and when it comes to negotiations that is something Obama has proven to be very good at.  So is it a good thing or a bad thing that our President is so horrible at negotiating?  I suppose it depends on your point of view.  Certainly in this most recent case I'd say its a VERY good thing.  But in any event, he defniitely seems to be the worst negotiator in Presidential history.