The debate over whether raising taxes or cutting spending is the way to avoid default has moved into high gear as the President issued a "Grand Compromise" to the Republican Congress that includes significant tax increases, as well as long-term spending cuts. So far, the GOP is having none of it. But I think we can simply the political calculation going on in the halls of Washington:
- IF the US Government goes into default, we will vote everyone out.
- IF the only spending cuts are to take place 2, 3, or 4 years out, we will vote out every Republican
- IF there are tax increases, we will grumble but live with it. Your job is probably safe.
- IF there are ONLY tax increases and no substantive spending cuts, we will vote out every Republican.
- IF Medicare, Social Security, and Military Spending remains off the table, nothing will be resolved and we will vote everyone out.