Sorry, Max: We’re going over the cliff – and the Grinch can’t save you

By at December 16, 2012 | 10:35 pm | Print

Sorry, Max: We’re going over the cliff – and the Grinch can’t save you

The Grinch saved Whoville’s things from certain doom on his Cliff. Now, with America staring down the Fiscal Cliff, it’s time to let the sleigh fall down.

It’s the most immortal scene in Chuck Jones’ animated adaptation of Dr. Seuss’ epic Christmas masterpiece, How the Grinch Stole Christmas!: Max, the Grinch’s loyal (if horribly abused) canine companion, and the thief’s sleigh full of stolen possessions from the citizens of Whoville are about to fly off the cliff, destroying everything in the packages, boxes, and bags that are with them up on the mountaintop.

The Grinch, suddenly overwhelmed by the Spirit of Christmas, realizes the errors of his ways. His heart grows three sizes that day, so they say, surging strength through his thin frame.  And our notorious villain picks up the sleigh, saves it and Max from the daunting cliff, and rides down to the village, joining in the celebration and even carving the roast beast.

Such a happy ending to one of Christmas’s most engaging cartoon shorts.  Unfortunately, our horribly-named fiscal cliff isn’t likely to have anyone save the day.

In the real world, we’re faced with our own cliff – and this time the sleigh is filled with taxpayer money en route to Uncle Sam’s grubby coffers.  If Congress fails to reach a deal by January 1, the Bush tax rate cuts – which supposedly used to be just “for the rich” but suddenly are now extremely helpful “for the middle class” – will expire, and the “Sequester” will go into effect – that is, nominally (but supposedly “draconianly”) reducing the rate of growth of government spending, with very minimal actual cuts.

The reality is that Congress and the President seem to be fundamentally incapable of reaching a deal.  Speaker John Boehner, the day after the election, came out in what I felt at the time was brilliant starting move: put revenue on the table to demonstrate that the Republicans were executing a good-faith effort to solve the problem, and negotiate from that starting point.

Over time, however, as President Obama continued to push incessant tax rate increases for the so-called rich and present only faux spending cuts as meaningless as ever, Boehner should have abandoned the revenue talk and focused attention where it belongs: on government spending, which continues to be at its highest levels since World War II.  Instead, fearful that the Republicans will get blamed for inaction (which will happen no matter what they do), our esteemed Republican leader has seen fit to negotiate more and more on revenue and tax increases, culminating in today’s proposal to tax millionaires more, reminiscent of Obama’s “Buffet Rule” initiative.

Boehner keeps giving Obama more and more on “revenue” and leaving it up to Obama to propose spending cuts – emboldening the president and seemingly strengthening his hand.  That’s like telling your 10-year-old child to propose a Christmas present budget without keeping income in mind.  It’s ludicrous.

No matter what, President Obama – who has since declined Boehner’s proposal – is going to keep fighting for the anti-growth tax increases that Republican leadership appears all-too-willing to give to our illustrious leader – meaning a clear political victory, wrapped up in a bow and placed in his stocking just in time for his Christmas vacation in Hawaii, and all at the expense of jobs and the economy.

It is sheer insanity: Republicans keep giving more and more ground on taxes and “revenue” – which is not the problem – and, yet again, pushing off addressing spending until later – kicking the lump of coal down the road in some absurd anticipation that they’ll actually get more spending cuts then in exchange for a debt ceiling increase.  (Because we all know that worked so well the last time they negotiated on that one.)

Have our Republican leaders not learned anything about this president in the past four years?  Apparently not.

As I see it, there are two possible alternatives for this fiscal cliff debacle:

  1. Obama gets some version of what he wants – tax hikes on the so-called rich (really, on investments and small businesses) and insignificant reductions in spending increases in the future.
  2. The Grinch stays grinchy, his heart remains small, and we go over the cliff – resulting in higher taxes for all but deeper (yet still fairly small) cuts in spending increases that at least get us started on the path to fiscal sanity.

Believe me, I’ve been resisting this inkling for weeks, but it’s time we choose the latter.  I’m sorry, Max, but we’ve got to go over the cliff.

At this rate, and with the faulty leadership we’ve got in Congress right now, economy-crippling tax increases are going to happen no matter what.  Obamacare taxes will start going into full effect next month, and if Obama gets his way on the “fiscal cliff,” we’d not only see a rise in income taxes on countless small business owners, but a 57% increase in capital gains tax rates to 23.6% and a near-tripling in dividends tax rates to 43.2% (including Obamacare surcharges).  Talk about a way to gut economic growth and launch us into a second recession.  As the nonpartisan Tax Foundation reports:

When Tax Foundation economists modeled the long-term effects of increasing the capital gains top rate to 20 percent and letting the tax rate on dividends revert to 39.6 percent for people in the top two brackets, they found that this policy would lower GDP by 2.15 percent and that it would not raise any new tax revenues because of its depressive effects.

Moreover, if a tax increase deal is reached, it will likewise be negotiated at the expense of reductions in future government spending, much less real spending cuts.  In other words, the supposedly “draconian” sequester will not go into effect – and Obama will undoubtedly offset any supposed “cuts” he’s proposed with new pet porkulous projects.

So now the question becomes, do we raise taxes on investors and small business owners, consequently crippling the economy more, but barely put a scrape on Uncle Sam’s spending sleigh – or do we go over the cliff and raise taxes on everyone, also crippling the economy, but finally get at least a stab at some much-needed spending cuts to help us deal with the looming fiscal crisis?

After significant observation and consideration, I’ve concluded that the only serious option is the latter.  I vehemently oppose tax increases on anyone, especially me!  But with the president we’ve got, and the disappointing leadership in our own party, we’ve really got no choice.  It’s time to stand our ground for the greater good and for principle – and to look toward the long-run, not just the short run.

My apologies to Max and the people of Whoville.  Keep your chins up, guys.  We’ve just got to keep up the fight to preserve liberty and economic sanity.

That’s what 2014 and 2016 are for.

This is just another call to action.

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