“No Man’s life liberty or property is safe while the legislature is in session”.

- attributed to NY State Judge Gideon Tucker

Monday, July 11, 2011

The Debt Limit Talks- Again

Following on this recent post about the debt limit talks, I'm pleased to have awoken this morning to news that the so-called 'grand bargain' is off the table.

Fortunately, as a recent lead staff editorial in the Wall Street Journal hoped, Boehner wisely rejected the 'give something now for nothing later' tactic that Wonderboy was trying to lure him into accepting.

Democrats really don't seem to accept that people behave according to changes in taxes and regulations, as I wrote here in the prior linked post,

"What nonsense! That seems to be where Democrats show their innate stupidity. They treat tax rates arithmetically, never seeming to comprehend that you get less activity of what you tax. That consumers and producers respond to minimize taxes paid, which is why the long run average is 18% of GDP."

I'm beginning to believe that, with the end of the cold war and the dissolution of the Soviet Union, the Democratic party has stepped in to take the place of the USSR in trying to destroy the United States.

Certainly, the Dems have eagerly embraced the old Soviet Union's habit of assuming what they have is theirs, then negotiating to take what is the other party's. In this case, Wonderboy assumes taxes should rise to punish those who've succeeded financially, while offering phantom, future spending cuts.

Why, with decades of evidence demonstrating that tax revenues simply do not rise above 18% of GDP, would any sane, intelligent, informed federal official believe that raising tax rates and creating new taxes will do anything but drive more job- and investment-killing, tax-avoiding behavior?
Let's hope that we get, instead, small-ball along the lines of what John Taylor wrote recently in the Journal. Something like a $2-3T spending cut deal for raising the debt limit now by slightly less, then return to the topic after November, 2012.

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