QUOTE OF THE DAY
Reason: Barack Obama: 'We don't have a spending problem'
The media portrayal of the fiscal cliff standoff (and the debt-ceiling talks from which it sprang) generally portrayed President Barack Obama and the Democrats as pragmatists attempting to negotiate with intransigent Republican ideologues. But as ever, the stance of non-ideological problem-solving itself is rich with ideological content. For the latest example read Stephen Moore's Wall Street Journal interview with Speaker of the House John Boehner (R-Ohio).
CNBC: Income Inequality: Is It Good for Everyone?
Income inequality has been on the rise for three decades in the United States, according to the Congressional Budget Office, with the gap between the "haves" and "have-nots" currently at its widest point since 1967.
But as Democrats and Republicans wrangle over fiscal "fairness" and taxation, some experts argue that income inequality is not such a bad thing. They even go as far as saying that America's economy functions on the basis of it.
The debate on income inequality has featured heavily in U.S. politics. Prominent Republican and former runner for the GOP's presidential nomination, Rick Santorum said last February that income inequality was part of the fabric of American society, and long should it be so.
"There is income inequality in America. There always has been and hopefully, and I do say that, there always will be," Santorum said during a speech to the Detroit Economic Club. "Why? Because people rise to different levels of success based on what they contribute to society and to the marketplace, and that's as it should be," he added.
Bloomberg: US May Run out of Cash for Bills by Mid-Feb.
The U.S. might run out of funds to pay all its bills as early as Feb. 15 after it exhausts emergency measures undertaken when it hit the $16.4 trillion debt ceiling at the end of last month, the Bipartisan Policy Center said today.
The U.S. Treasury Department has started using so-called “extraordinary measures” to keep funding the government. Treasury Secretary Timothy F. Geithner said Dec. 26 that “under normal circumstances” those safety lines would last for about two months and create about $200 billion of “headroom.”
“Based on financial data from Treasury, we estimate that the government will be unable to pay all of its bills as early as Feb. 15,” Steve Bell, senior director of the economic policy project at the Washington-based Bipartisan Policy Center, said in an e-mailed statement today. “We have less time to solve this problem than many realize.”
Fortune: Good luck estimating your new tax rate!
The legislation that edged our country away from the alleged "fiscal cliff" isn't named properly. Instead of calling it the American Taxpayer Relief Act of 2012, Congress should have called it the Accountant Full Employment Act of 2012. That's because the legislation, which supposedly doesn't increase taxes for anyone other than "the rich" with adjusted gross incomes of $400,000 for a single filer and $450,000 for a married couple, made an already incomprehensible tax system even more incomprehensible.
AEI: We Are the 98 Percent
The only way to finance a big European-style state is to have it paid for by massive taxation of everyone, mostly the middle class. Right now, we are avoiding honest debate on this fact.
The central issue of our time is the debate over the size and scope of government. Two unpleasant but undeniable mathematical truths limit the feasible policy choices. The recent sound and fury of the fiscal cliff follies in the end signified nothing because the resolution was in fact just a denial of both truths.
The first truth is that the current tax rates cannot support the promises made to middle-class Americans. The most unaffordable items in fiscal projections are Social Security for everyone and government-sponsored health care for the middle class. You cannot preserve these even with Draconian slashing of military, infrastructure, welfare, education, and other expenditures.
Bloomberg: Why a Debt-Ceiling Fight Is Good for the Country
Watch what he did, not what he says. President Barack Obama says he won’t agree to spending cuts in return for Republicans’ raising the debt ceiling. Yet he did exactly that in 2011. And he should do it again.
The debt ceiling ought to be raised because nobody has a plan to eliminate the deficit immediately, and there is no popular support for doing what that would take. A congressman who isn’t presenting and supporting a zero-deficit-now plan has an obligation to give the federal government the additional borrowing authority that continued deficits make necessary.
CARTOON OF THE DAY