Yes, it is quite possible for Republicans and Democrats to compromise on some small issue such as tax breaks to those who hire more people-which will have the unintended consequence of rendering American business less efficient and less able to compete with Asians and push us into a game that we ultimately cannot win, competing on human labor rather than technology -but there is no possibility whatsoever of compromise on the scale necessary to save the country from the impending crisis. That is because the the margins consisting of about $6 trillion-$7 trillion were squandered by Obama and to a lesser extent by Bush and so there is nothing left with which satisfy both sides and still solve the entitlements problem and, at the same time, solve the stampeding deficit and staggering debt.
Putting aside the question whether Obama even desires a healthy economy and an honest fix, the problems he has created are so massive that they cannot be cured except by the dismantling of his administration's record, and more. By way of example, consider the Bush tax cuts which are about to expire next year because the Democrats would not make them permanent. Here is what Goldman Sachs has to say today about the effect of the Bush tax cuts will have if the Democrats force them to lapse:
14) If Congress fails to address fiscal cliff, fiscal policy likely to be 4 ppt drag on US growth in 1H 2013 – our base case assumes that drag will be 1 ppt next year. Alec Phillips: (i) We estimate that if Congress fails to address the "fiscal cliff" at year-end, fiscal policy will weigh on growth by nearly 4 percentage points in the first half of 2013. By contrast, our base case assumes that fiscal restraint will reduce growth by only 1pp next year; if Congress were to extend all of the expiring tax and spending measures, the effect on growth would be reduced to around 0.5pp. (ii) Comments today by House Speaker Boehner and Treasury Secretary Geithner provided some new guidance on the potential timing of fiscal decisions. Secretary Geithner affirmed our own expectation that the deadline for raising the debt limit is unlikely to be reached until early 2013. Speaker Boehner indicated openness to a short-term extension of fiscal measures as a means of achieving a broader fiscal agreement in 2013.
4%! That would tumble and economy with an anemic GDP of 1.9% into a real recession. Add to these burdens the regulatory jihad being conducted against the American enterprise and energy by the EPA and other agencies and the smothering effect of Obama Care and it is clear that by summer 2013 the American economy will be in ruins.
Every dollar that Obama has squandered means that we are without that dollar to reconstruct our economy now. Obama will not cease his jihads so there can be no "compromise." There are simply no dollars left to grease the Democrat party machinery and fix the economy.
We need an election to the death in November. There must be either salvation or ruin. We cannot have Obama profligacy and recovery too. The coming reckoning can be resolved only at the ballot box and not by cosmetic compromise.
