Economy & Budget

House Republicans may have taken their war on the middle class one step too far with their unfathomable opposition to extending the Obama payroll tax cut. And for a group that usually has a concise message, they’re flailing at their explanations.

For the last three years, the Republicans’ message has been clear and concise — tax cuts will solve all of our problems. Deficit? Cut taxes. Recession? Cut taxes. War expenses? Cut taxes. They support tax cuts for the wealthy, tax cuts for corporations (they’re people too!) tax cuts for Big Oil. They support tax cuts for basically anything.

Just yesterday the House GOP rejected legislation that would have extended payroll tax cuts and jobless benefits for an extra two months. While it would have been great to see bipartisanship take a backseat to getting something done, I have to agree with House Speaker Boehner and his pursuit of tax cuts and how necessary it is to cut spending. It seems like Obama and his Democrats are missing the truly big picture.

You see, what is missing among all this payroll holiday tax talk is the admission that America is broke. We all know it, we all feel it, and at the very least we see it every day in one form or another: America is broke!

How easily we forget.

Hopefully the American people, during this current election cycle, will remember the lavish praise heaped upon Jon Corzine by President Obama and Vice President Biden. They told us he was one of the brightest and wisest members of their party.

This is the same Corzine who presided over one of the largest financial debacles in the history of America, in which $1.2 billion of investors' capital disappeared without a trace.

The business community realizes that the increased money supply is financing government spending and the private sector must eventually pay the piper.

Many private wealth individuals and businessmen are hoarding cash for fear of over-regulation and the Obama administration strangling real growth of the U.S. economy. Consequently, the business community is not investing as much as it might because it is concerned about inflation and higher future taxes to pay for the borrowing.

The ill-conceived idea to stimulate the economy through a tax credit for firms that increase employment shows an academic economist’s fundamental lack of understanding of why companies increase employment.

Jobs are a byproduct of increased sales and revenues. Companies do not like to hire employees. They are expensive, require management and cannot be easily laid off in the event of incompetence or loss of business.

Companies increase employment because they have additional business that needs to be processed, and they cannot process it through overtime or increased capital.

Something important happened last Friday in Brussels, although you’d never guess from the media coverage here (The Washington Post relegated coverage of the EU summit to page 19 yesterday).

British Prime Minister David Cameron’s decision to walk away from a budget tightening deal with the other 26 members of the European Union aimed at saving the euro has caused upheaval within the ruling U.K. coalition, roiled relations between Britain and the rest of the EU and put the issue of Britain’s future membership of the EU back on the table.

President Obama on “60 Minutes” Sunday offered a series of excuses for lack of success and new suggestions for lowering our standards. Republican candidates in their presidential debate Saturday again turned the GOP contest into a bad-reality television show where candidates unworthy to be president make statements no president should ever make. The House and Senate cannot get anything done while favorable ratings for Congress hover between 9 and 11 percent.

Wall Street firms and banks are back asking for another humongous bailout, this time in Europe, but it affects American banks and firms as well. Meanwhile, banks continue to hoard massive amounts of money they refuse to loan, throw homeowners out of homes in sadistic numbers, pay themselves massive salaries and bonuses in cash or cheap stock, and give speeches at investment conferences about moral hazard.

Where was the Commodity Futures Trading Commission when investors needed it?

The CFTC had recently done an audit on MF Global and found it in compliance. The CFTC also lets investment firms with a fiduciary obligation to their customer use their customer’s money in complex overnight transactions called repos.

Treasury Secretary Geithner in Europe this week announced his support for the German and French plan to stabilize the eurozone.
 
Secretary Geithner merely sings in the chorus among his colleagues — he is one among many. He was virtually tossed out of Europe in September when he told European leaders to put aside their differences and resolve issues related to the catastrophic risk for markets because if Europe didn't erect a stronger firewall to end the European debt crisis then the world would truly be in trouble.

The Hill’s A.B. Stoddard takes your questions with Pundits Bloggers John Feehery and Peter Fenn about Newt Gingrich’s rise in the polls and legislation Congress may vote on by the end of the year.