The Games They Play

Politics as performance art … er, without the art.  I don’t know about you folks, but I’m sick and damn tired of the games people play, the manipulation and hypocrisy from our elected officials.  Just do the job and sit down and shut up!!!  Here’s what we can expect to dominate over the next month or two …

Get ready: Two big upcoming theatrical performances

Biden wants to tax the rich, and House Republicans don’t want to raise the debt ceiling. Here’s what will happen.

Robert Reich

09 March 2023

President Biden is proposing to trim the federal budget deficit by close to $3tn over the next 10 years. He was an FDR-like spender in the first two years of his presidency. Has he now turned into a Calvin Coolidge skinflint?

Neither. He’s a cunning political operator.

Biden knows that he – along with his three immediate predecessors (Trump, Obama and George W Bush) – have spent gobs of money. In addition, Bush and Trump cut taxes on the rich and on corporations.

Not surprisingly, the national debt has soared. It’s not so much an economic problem as a political one. The huge debt is giving Republicans a big, fat target.

House Republicans are planning to stage theater-of-the-absurd pyrotechnics – refusing to raise the debt ceiling. Which means that at some point this summer, Biden’s treasury department will say that the nation is within days (or hours) of defaulting on its bills. A default would be catastrophic.

To counter this, Biden is planning his own pyrotechnics.

In the budget released this week, he’s proposing a “billionaire minimum tax” that would require wealthy American households worth more than $100m to pay at least 20% of their incomes in taxes (most middle-class Americans pay about 30%). Plus, they’d have to pay 20% a year on unrealized gains in the value of their liquid assets, such as stocks, which can accumulate value for years but are taxed only when they are sold (and not even then, if left to their heirs).

Here’s the important thing: the tax would apply only to the top one-100th of 1% of American households. Over half of the revenue would come from those worth more than $1bn.

Biden is proposing additional tax hikes on the wealthy: reversing the Trump tax cut by raising the top tax rate to 39.6% from 37%, increasing the corporate tax to 28% from 21%, and raising the tax on stock buybacks from 1% to 4%.

All told, Biden’s new tax proposals would amount to an almost $3tn tax increase over a decade – on the richest of the rich. Oh, and did I say? Taxing the rich is enormously popular.

Biden also wants to let Medicare officials negotiate with pharmaceutical companies for lower drug prices and cap the costs of drugs for seniors – a proposal that is also hugely popular.

But here’s the dirty little secret. Neither of these two theatrical productions – neither the Republicans’ refusal to raise the debt ceiling nor Biden’s big tax hike on the super-rich – will ever happen. They’re both fantasies.

A default on the nation’s obligations would bring on an economic calamity that Republicans don’t want to be responsible for. And a giant tax increase on the super-rich would be a miracle, given their political clout.

These two productions are being staged for the public – two competing performances, each intended to score political points against the other.

Biden’s performance is rational, and the Republicans’ is irrational and unserious, but that doesn’t really matter.

They will both end in a dramatic flurry of last-minute negotiations, seemingly death-defying moves and countermoves, and breathtaking cliffhangers.

Exciting? Of course. Important? Meh.

The denouement? The debt ceiling will be raised. The national debt will be lowered a bit. Social Security and Medicare will be left alone. And Biden and the Democrats will have leeway to do one or two more things before the gravitational pull of the 2024 election pulls them in – perhaps expand childcare or pre-K or enable more students to attend community college.

Yesterday I was in Columbus, Ohio, debating Arthur Laffer about the economy. We appeared before hundreds of students who had never heard of Arthur Laffer (or me, for that matter). If you’ve heard of him but don’t quite recall what he did, let me refresh your recollection: Art was the founder in the 1980s of so-called “supply-side economics,” the bonkers idea that the benefits of lower taxes on the wealthy trickle down to everyone else.

Trickle-down economics provided the theatrical scripts for Ronald Reagan’s, George W. Bush’s, and Donald Trump’s tax productions. The tax cuts were real, but the idea they were based on was always a fantasy. Nothing ever trickled down.

15 thoughts on “The Games They Play

  1. Jill, this is not the time to hold the debt ceiling hostage. Reneging on debt payments is unwise because of the echo effect. It frustrates me that if the GOP cares so much about the debt, why did they go beyond doing nothing when the led both chambers and had a GOP president in 2017-18?They actually increased the debt by about $2 trillion with a tax law change that helped the wealthy and corporations.

    Dems are better at the debt than Republicans, but they are far from perfect. We had a great chance with the Simpson-Bowled Deficit Reduction committee and the recommendations were shelved. Ironically, if the committee had gotten a couple of more votes, it would have required Congress to act.

    Per the nonpartisan Committee on a Responsible Federal Budget we need both spending cuts and revenue increases. The math will not otherwise work and do not let any politician tell you it will, Democrat or Republican. I have had this conversation multiple times with staff of elected officials and neither side gets it. Full stop. BOTH are needed.


    Liked by 1 person

    • Agreed. In fact, in my view, there is never a time to hold the debt ceiling hostage. It is debt we have already acquired, already reaped the benefits from, and to default is simply unconscionable. It lowers us in the eyes of the world.

      No, neither every Democrat idea nor every Republican idea are perfect, but irregardless, we have to pay the bills. A husband and wife can bicker over how much one or both of them spend on trivial ‘stuff’, but when the rent comes due, they pay it or face eviction. Period.

      Sadly, it seems that the popularity contest outweighs good governance these days. The circus must go on, y’know. Sigh.


  2. Pingback: The Games They Play | Ned Hamson's Second Line View of the News

  3. Politics is a game, especially for most Republicans, but also for a few Democrats. It’s all about winning, and not about how you play the game. Pne good thing about Republicans, they dob’t have the intelligence to realize not everyone likes the way they play. But the US needs to survive the next few elections, and the voters will lose respect for them. Because when played as a game, everyone loses, even the Republicans!

    Liked by 1 person

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