The Fiscal Cliff

President Obama now has the perfect opportunity with the so-called "fiscal cliff" to get a good deficit reduction deal that will not crash the economy, but to understand this we need to first define the fiscal cliff for what it truly is.

At the end of the year the Bush tax cuts, Obama's payroll tax cuts, and a host of spending cuts on defense and medicare providers all take effect. The fact that the entitlements cut is only on providers is key because only doctors and hospitals would feel the pain not beneficiaries who will receive the same service regardless.

Going over the cliff would greatly decrease the deficit; however, it would come at the cost of the economy and plunge the country into another recession. Many economists, notably Paul Krugman, believe that President Obama's best option is to allow the fiscal cliff to happen.

In January, or possibly later but at some time in the near future, the President would propose a plan that would cut taxes back to the pre-fiscal cliff levels on everybody except those earning more than $250,000 a year, cut the military budget by the amount that the pentagon has said we should cut it by (this would be a net increase to the military budget after the fiscal cliff), and reform entitlement spending in a way that does not affect benefits, similar to the $716 million "cut" the Obamacare made to medicare which was actually just a reduction in wasteful spending that allowed medicare to last longer and close the "donut hole" for prescription drugs created by medicare part D.

Many of the less optimistic Democrats would say that Republicans would still vote against this, but here's the problem: President Obama's plan would be cutting taxes, increasing military spending, and cutting entitlement spending. A Republican voting against this plan would be like a Democrat voting for a constitutional amendment to ban abortions: it's just not going to happen. Additionally, the country would face a recession in those months and constituencies on both sides would push congress into passing the deal.

President Obama, whether intentionally or unintentionally, has created the perfect situation to pass through his budget plan. Hopefully, he will be able to start his second term off right by doing it.

P.S. Hopefully I can elaborate on this more in a future blog post, but the one thing that I, along with many others including Warren Buffett, disagree with the President on are the tax increases. $250,000 is too low of a rate to increase taxes on and hopefully President Obama would consider increasing the "cutoff".

Mitt Romney's Big Debate Lie

I think it is a general consensus that not all of what Mitt Romney says in the debates is entirely accurate,  so I can't write articles debunking all of his ridiculous claims. However there is one important, commonly-held misconception that he has mentioned in both debates that President Obama failed to correct him on.

It's the deficit. Romney has repeatedly said that the President has doubled the deficit even though he previously had promised to cut it in half, but that simply is not true. Both Politifact and factcheck.org have debunked that claim stating that the President has actually cut the deficit by 8%.

Of course 8% is hardly half and Romney might have a point to say he did keep with his promise, but he should not be allowed to go around giving out completely false statistics like he has throughout the entire race.

Additionally Obama's budget plan actually has concrete deficit reduction measures through a combination of tax increases and spending cuts unlike Romney's which does not touch tax revenue (his tax plan also does not work, but that's a post for another day) and promises to cut spending even though he has barely outlined enough to reduce the deficit in any noticeable fashion.

Link to the Politifact article referred to: http://www.politifact.com/truth-o-meter/statements/2012/oct/05/mitt-romney/mitt-romney-says-barack-obama-has-doubled-deficit/

Why Obama Now

Just in case you haven't seen it, this is a great video on why we need President Obama to fix the economy and why Romney's plan would not work.

Better Off Now Part One: The Economy

It's a tough idea to believe, but America is better off now than it was four years ago.

We don't want to believe it because we have always believed that we could do better and the recovery is somewhat slow, but there has been a recovery and we need to acknowledge it as well as the President's role in it.

When President Obama took office, the unemployment rate was 7.9%, today it is 7.8%. A critic would argue this is barely a recovery, but remember that the economy was STILL in free-fall and the unemployment rate continued to increase until President Obama enacted the economic stimulus.

So more Americans are working now, but what about wall street? Surely the President's crippling regulations have hurt us there. Actually no, the S&P 500 has gone up more than 74% and the nasdaq has been doubled. In other words, the stock market has done better during Obama's presidency than in any of the past five presidencies.

When President Obama came in to office, many Americans had houses that were underwater and were facing foreclosure. However, President Obama reduced costs to refinance for FHA mortgages and brought the overall mortgage rate down.

Of course corporations are doing much worse under President Obama, right? Republicans are the party for the rich and Democrats hate corporations, right? WRONG, corporate profit rates are much higher than they were when President Obama took office and he plans to lower the corporate tax rate in order to help with growth.

Republicans can say whatever they want about the current state of the economy, but the situation now is as clear as it was 80 years ago: republicans got the country into an economic mess and democrats cleaned it up. The question for voters is not about whether they wanted a faster recovery or not; it's about whether they want continued economic growth, with balanced deficit reduction or insanely unbalanced deficit reduction plans and rolling back of regulations which will plunge the country in to another depression.

Gun Control

It is time for this country to re-evalaute gun laws and create real, effective control laws. The recent shooting in Colorado showed all of us the dangers that come from the "right" to own a gun.

When the constitution was originally written, guns did not have the ability to mass murder people like automatic weapons do today. The framers of the constitution clearly did not intend for citizens to be able to massacre other citizens because they created laws against murder and said that we were all guaranteed the right to "life, liberty and the pursuit of happiness". 

Proponents of gun rights say that they are mostly used for hunting and self defense. The hunting argument can be true for some guns, but nobody hunts with an assault rifle or a handgun. As for the self defense argument, you would not need guns if other people did not have them.

If there could be two worlds, one with guns and the other without them, most sane, nonviolent Americans would choose the world without them. Tighter gun control is desperately needed in this country and the Democrats need to get over their re-election fears and address this issue. 

Ron Paul and the Republican Platform

Ron Paul is not dumb; he knows he is not going to win the Republican presidential nomination. So why even stay in the race? He is staying in the race in order to make vital changes to the Republican party platform.

Unlike most Republicans, Ron Paul is anti-war and a civil libertarian. He is opposed to the death penalty, the war on drugs and does not believe the government, especially the federal government, should be able to regulate marriage insisting instead that it should be up to local religious institutions.

However, Rick Santorum is currently fighting Ron Paul and telling his supporters to make sure Paul's ideas do not get on the platform. Santorum is fighting against change in the right direction; he is holding on to his outdated views and hopefully the Republican party will not allow this.

There's a reason Ron Paul polled much better than the other Republican candidates. Ron Paul believes in moving in the right direction (on social and foreign policy at least) and so he captured more of the independents and even a few of the "blue dog" Democrats who favor Democratic social policy but agree with Republican fiscal policy.

The Republicans now have a clear option ahead of them: progress and move in the right direction by fixing their platform or keep on with their oppressive social policies and hawkish foreign policy by maintaining the status quo.

Ron Paul said it himself he is trying to save the Republican party from what it has become. Obviously, they have no hope on fiscal policy but Ron Paul is at least trying to move them in the right direction on social and foreign policies.

Obama Haters

No article today just a few links for those who always "hate" on Obama. This is particularly for the people who claim he "hasn't done anything".

This is only a partial list of accomplishments of all the things he has done since taking office: http://pleasecutthecrap.typepad.com/main/what-has-obama-done-since-january-20-2009.html

Here are some more great bills passed by Democrats but blocked by the GOP (some of these really open your eyes to the fact that Republicans will block any bill that's Democrat sponsored even if it is clearly good for the country): http://pleasecutthecrap.typepad.com/main/a-small-sampling-of-bills-house-dems-passed-gop-senate-blocked-last-session.html

Finally, this one is for people (like me) who thought the President folded during the debt ceiling crisis and gave in to the Republican's demands: http://www.thepeoplesview.net/2011/08/paul-krugman-is-political-rookie-or-how.html