Let me preface this discussion (okay, monologue) with some facts. First, yes, I am a liberal, socially and economically. I’ll try to keep unproven political theory to myself however. The other facts are evident. The Republicans control the House, Democrats control the Senate, and a Democrat is in the White House. This will all be true for the next two years, barring some form of zombie apocalypse.
First, the budget will not be balanced anytime soon. Republicans have vilified spending and promoted the idea of small government. They also want to make the Bush tax cuts permanent. While this ideal may be commendable to many who voted Republican, it simply won’t work. For starters, President Obama will veto any bill that extends the Bush tax cuts, as it will add $4 trillion to the national debt by 2020. If for whatever reason the bill passes, this would only exacerbate the national debt problem. Whether or not you believe tax cuts for the rich will help our economy, it seems unlikely that the country is ready to test that theory. Democrats may concede a small tax cut for the rich, but that’s it.
Reducing spending is another issue entirely. Nearly everyone agrees that curtailing spending is a good idea; certainly now there will be no further stimulus bills. However, cutting expenditures is different from denying new ones. I’m sure certain programs will be cut, but there doesn’t seem to be any consensus on what should be cut. Even if somehow Republicans agree on a significantly smaller budget, it still has to pass through the Senate and get President Obama’s signature on it. Again, this is very unlikely. The one additional problem is unemployment. Cutting federal spending will only expand the unemployment pool.
One of the biggest questions is what will happen to “Obamacare”? Those looking for it to be repealed will be sorely disappointed. It is one of Obama’s cornerstone achievements in office so far. He will veto a straight repeal of the bill, whether or not it turns out to be in the country’s best interest. However, Republicans excel at obstructionism. They will find a way to restrict funding to health care programs. What effect this has on health care in general remains to be seen.
So where does the country go from here? One thing is for sure: the economy will shrink. Americans will have a smaller and smaller share of the global economy due to the emergence of China and India. Unemployment will also remain at a high level, if not higher, for similar reasons. Labor is simply much cheaper there. Leading figures from either party who claim to have solutions to this are kidding themselves. If any significant legislation is passed in the next two years, it will be in response to problems yet to arise.
So what’s in store for 2012? At the congressional level, not much. Republicans won’t be able to play the anti-government card again, as they have a semblance of power in Congress. And as they probably won’t be able to set much of an agenda, I don’t see much of a gain for them. Democrats won’t see much either, unless they’re able to set a new course for their party’s direction. They need a new battle-cry to energize their base. As far as Obama goes, he may not be as popular as he once was, but does anyone see any Republicans tanking him on in a lengthy campaign?