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Sun Dec 9, 2012, 11:52 AM

"...if Republicans are driving a Chevy Spark, the president is driving a Mack truck."

http://www.nytimes.com/2012/12/09/business/getting-to-yes-offers-clues-to-fiscal-talks.html?ref=todayspaper&_r=0

In Talks, G.O.P. May Have to Just Say Yes
By ROBERT H. FRANK
Published: December 8, 2012

snip//

If the year ends without a deal, tax rates for everyone automatically revert to those in effect when President Bill Clinton left office. Neither side wants that to happen, but if it does, the president has a strong hand to play. On Day 1 of the new Congressional session, he could propose legislation that would restore the Bush tax cuts for families with incomes under $250,000. Republicans could then vote in favor, in which case the president gets exactly what he had hoped for; or they could vote against, in which case they will have blocked a reduction in almost every voterís tax rates. They may wish that these werenít the alternatives they face, but both sides know that many Republicans would find the second option politically untenable.

That realization appears to have led some Republicans to resurrect their time-honored claim that because many top earners own small businesses, higher top tax rates would severely compromise job creation. But that argument flies in the face of the basic cost-benefit test that governs rational hiring decisions. As every economics textbook on the subject makes clear, a business will hire additional workers whenever, and only whenever, their contribution to the bottom line promises to exceed their pay. If that criterion is satisfied, hiring makes economic sense, no matter how poor the business owner might be. And if it isnít, no hiring will occur, even if the owner is a billionaire.

An awareness of the weakness of their negotiating position may also explain recent Republican attempts to portray the impasse in Washington as a fiscal cliff that poses an unthinkable disaster for the nation. But as Jonathan Chait of New York magazine has argued, the fiscal cliff is a bad metaphor for the situation we are facing. Because middle-class tax rates would be unlikely to remain higher for long, they would have little impact on overall spending. And as the president would tell voters, even that limited impact can be avoided by making the middle-class tax cuts retroactive to Jan. 1.

THE same goes for so-called sequestration ó the across-the-board spending cuts to defense and other non-entitlement spending that automatically start to occur after Jan. 1 in the absence of a budget deal. As both sides recognize, blanket cuts are a terrible way to reduce government spending. But here, too, getting to yearís end without an agreement would strengthen the presidentís hand.

snip//

Some have likened todayís negotiations to a game of chicken, in which the loser is whichever of two cars on a head-on collision course swerves first. But that metaphor isnít instructive without some additional texture: if Republicans are driving a Chevy Spark, the president is driving a Mack truck.

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Reply "...if Republicans are driving a Chevy Spark, the president is driving a Mack truck." (Original post)
babylonsister Dec 2012 OP
obxhead Dec 2012 #1
Cha Dec 2012 #2

Response to babylonsister (Original post)

Sun Dec 9, 2012, 03:02 PM

1. We are the job creators, not the 1%

I've been shouting this for years.

Only demand can create jobs. The only way to create demand is with fair living wages.

Money floods upward, it has NEVER trickled down.

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Response to babylonsister (Original post)

Sun Dec 9, 2012, 03:18 PM

2. Brilliant find, babylonsistah!

I love it..

Some have likened todayís negotiations to a game of chicken, in which the loser is whichever of two cars on a head-on collision course swerves first. But that metaphor isnít instructive without some additional texture: if Republicans are driving a Chevy Spark, the president is driving a Mack truck.




http://theobamadiary.com/

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