Rs Demonstrate Savvy Negotiating Tactics With Budget Proposal

With the short term Federal budget crisis averted last week, attention in DC will now turn to longer term solutions for the spectacular budget deficit this country has.

And as this debate starts, here's something to ponder...

While the proposal from the Republicans to cut out $6 trillion in spending, together with more tax breaks for the wealthy is WAY, WAY off the deep end of reasonable, it will accomplish one thing even if none of it is exactly adopted. And what is that? It moves the debate over what to cut, what not to cut and what to offer as tax policy radically to the right.

By staking out a position so far on one side, conservatives can "negotiate" away a lot of their official plan, but still end up with what they want - spending cuts or elimination of big domestic programs (but not defense) and big tax cuts for the wealth and corporations. I'll save judgement on how effective that economic recipe will be for the economy (although I think you already know), and just say that I think that's what's going on here. That's what the Rs are up to with this radical initial proposal.

What should the Democrats do? Well, with the White House and Senate in their control, my humble opinion is they should simply say, "No, we reject out of hand what you are proposing. It is a non-starter. The provisions you are proposing have been proven again and again as failures. Try again. And oh by the way, here is our plan." And that plan better be sound, good and promoted big time to the American public. That would at least attempt to cut off the "move the debate to the right" strategy of the Rs and re-establish the debate somewhere near the real middle of the political and economic spectrum.


What will the actually Democrats do? Well, if recent history is any guide, they'll play the game. They'll try to chisel away some of the elements of this Republican plan so they are not as bad as initially proposed, but in the end they'll sign off on legalisation that is very, very conservative.

Republicans Have Zero Credibility on the Budget Deficit

A friendly reminder as the Republican majority in the House drives the Federal government closer and closer to a shut down over the issue of spending cuts to address the massive Federal budget deficit...

It was this very same Republican Party that created the deficit through massive tax cuts and deregulation, combined with massive spending - particularly in the area of defense and the bailout of financial and auto industries.

That's right. In case you forgot, the Republicans controlled the combination of both houses of Congress and the White House from Jan. 2001 to Jan. 2009. And in that same time frame, our nation went from a budget surplus in 2000 to the largest deficit in the country's entire history by 2009. Thanks.

Also, many of the current leaders of the R party were in positions of leadership then. So, we're also not only talking about the same political party, but literally the same people who created our problems.

Keep that in mind when you see news about the Republicans wanting to address the budget issue. They have zero credibility on what works and what does not.

What If You Paid Zero Taxes Annually? Well, You'd Be Just Like G.E.

Are you concerned about the budget deficit?

As with any financial ledger, the Federal budget is comprised of what's going out (spending) and what's coming in (revenue)...and that tells the tale of whether we're in the red or in the black. And when we're in the red there is indeed need to be concerned.

But before you pick up your pitch fork, light up the torches, put on your broad brimmed hat and gather your government-hating neighbors to march under moonlight up the castle of today's government to demand them from spending money, consider this...

...the largest company in the world - a U.S.-based company - pays no taxes annually. That's right. General Electric pays zero corporate taxes. That's $0.00. Nothing. Year in and year out. That is a HUGE hit to the revenue side of the Federal budget ledger, and GE is by no means the only company doing this.

You can read how GE is getting away with this in the New York Times article HERE. They also published a handy chart that illustrates HERE.

Hell, no wonder that elephant in those GE TV ads is dancing!

It's fitting that the GE mascot on their TV ads is an elephant. Why? Well, they're getting away with paying $0 taxes annually because of laws and deregulation ushered in by the Republican Party during its reign of power...and the symbol of the R Party is, indeed, the elephant.

Sadly, this makes sense in another way...because of course it's a fact that we have seen the creation of the two largest budget deficits in our nation's history under recent Republican leadership (the 1980s and the 2000s) through their aggressive tax cuts for corporations and the wealthy, as well as big time deregulation. 

Which is why I was so ticked off when President Obama appointed none other than GE CEO Jeff Immelt as his advisor on business and the economy. Post HERE.

To me this is just one more glaring proof point that...we are being USED people. Used. This is the reality of the the conservative economic agenda. 

And you know what? It might even be bearable if GE was creating lots of new jobs in the U.S. with all the money they're saving in non-payment of taxes...but they are not. No, they're laying off employees and outsourcing more and more jobs to cheaper labor markets around the globe and keeping windfalls as executive bonuses and payouts to shareholders. This lack of revenue is no laughing matter. Not to mention the layoffs. Not having the billions of dollars in tax revenue annually from companies like GE really hamstrings effective government and the erosion of jobs hurts bad too. 

Look, you work hard, you pay your bills, you pay your taxes. If you run a small business, you're paying taxes and dealing with regulations. Meanwhile, companies like GE are literally gaming the system. And we just let them get away with it. 

All of which is to say, sure, it's easy to get mad at the government for spending in a time of budget deficits, but you need to keep in mind that there is a HUGE stream of revenue that should be coming in that is not and you might want to focus on that...

...and target #1 should be GE. 

Target #2 are the laws and regulations (or lack of them) that allow a company like GE to skip out on paying any taxes while the rest of us are burdened with it.