Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Will this be Boehner's "Peace in Our Time" Moment?
After insuring World War II by capitulating to Adolf Hitler in Munich, British Prime Minister Neville Chamberlain defended the agreement that he had just negotiated in what has come to be known as his "Peace in Our Time Speech." Chamberlain claimed that all parties at Munich wanted to avoid war. He said:
If a fiscal cliff settlement is arranged along the lines currently being discussed, look for House Speaker John Boehner to make a similar speech in the near future. He would say that all parties in the negotiations wanted to rein in the American budget deficits, something like this:
But does President Obama really want to reduce budget deficits and insure the long-term strength of the American economy? So far, he has done just the opposite. He has rapidly increased government spending. He has increased health care entitlement promises. He has surpressed production of American energy. He has enabled Chinese mercantilism while it steals American industries. And he has burdened American manufacturers and banks with excessive regulations.
In order to avoid a minor recession caused by the $502 billion in budget deficit cuts of the fiscal cliff, Boehner may be about to agree to a measly $200 to $260 billion per year of deficit cuts.
There may be a few sweeteners for Republicans, probably a slight rise in the age for Medicare benefits and a slight lowering of the corporate income tax. But the primary fact will remain. Instead of taking advantage of a post-election opportunity to reverse a disastrous economic course, he would basically be agreeing to continue $1 trillion budget deficits until the economy crashes.
In order to achieve this agreement, he would have to sell out every Republican voter who believes in either balanced budgets or lower taxes. His majority in the House might not survive the lack of enthusiasm in the next election for those Republicans who vote for this agreement.
What would he get in return for selling out his country and party? He would be invited to all of the best Washington cocktail parties. He would be lauded in the main stream media. It has already begun. Today's Philadelphia Inquirer editorial is headlined: "Boehner's back in the saddle."
Perhaps Gov. Sarah Palin would play the role of the economic Churchill of our time. Winston Churchill opposed the Munich agreement and warned of its dire consequences. Similarly, Palin pointed out on November 30, "We've already gone over the fiscal cliff. Now it's about how hard we hit bottom." If the debt-caused collapse happens, America could do worse than elect her to manage the disaster that she predicted, just as Britain called upon Winston Churchill to manage the disastrous war that he correctly predicted.
America's best hope for the future is that Boehner and Obama fail to reach an agreement.
Last 100 Years
Real Estate Taxation
Journal of Economic Literature:
Atlantic Economic Journal: