DEFICIT SOLVED!

Hey, we just read about a very exciting option for President Obama, which might actually manage to eliminate 75% of the federal deficit!  CHECK-IT–OUT at the New York Times.  It’s an option spelled out in an article by economist  David Leonhart, titled “Do-Nothing Congress as a Cure” published on April 12 in the Business section.

The gist of the article is that by eliminating all the Bush era tax breaks, and returning to the Clinton era taxes, America could eliminate 75% of our deficit.  The main problem that prevents this common sense action is a purely political one:  Obama campaigned on only eliminating tax breaks for the rich, those earning over $250,000 a year, and keeping the tax cuts for the middle class.  And while maintaining the tax cuts for middle America made some sense in the President’s first campaign (the economy was running on empty), that campaign promise today is out-dated. 

The economy is recovering and deficit reduction is now more important than pumping money into the hands of the middle class.  But the political dilemma remains.  Obama won’t break his campaign promise in a second term, and the Republicans won’t sign on to any deal that just raises taxes on the rich.  They demand that all the Bush era tax breaks be made permanent. 

Assuming that Obama wins a second term, Leonhart has a potential option for the President that just might work.  (If a Republican wins the White House, then look for permanent deficits into the future, and/or government slashed to the bare bones.)  If Obama is reelected then chances are more likely than not that the House and Senate will be Republican.  Divided government would reign.

And the Republicans have vowed to pass into law a bill that would make all the Bush tax breaks permanent, — and here’s the good part! — if Obama is presented with such a bill he can refuse to sign it because it has tax breaks for the wealthy in it, and then have political cover for letting all the cuts expire as they’re set to do at the end of 2012! 

If Congress can’t come to an agreement with the Administration, thereby becoming David Leonhart’s “Do Nothing Congress” — then the onerous Bush tax cuts disappear.

Problem solved!