As it took Nixon, with clear anti-communist credentials to stop the Vietnam war (even with secret bombing of Cambodia, and CIA shenanigans all over Southeast Asia, Kissinger, etc.); unfortunately it looks like it will take a Republican President with tax reduction and deficit reduction credibility in 2012 or in 2016 to finally say to the American people that the honest way out of this mess is to INCREASE taxes. The Republicans have always been masters of this bait and switch. Bill Gates’ and Warren Buffet’s cries of “we think the rich should pay more” will get some great play as morally the right thing.
Obama has no leg to stand on (and no cojones) to raise taxes, and cuts intended to fix the deficit will be deeply politically negative for him. This is of course the Republican master political calculus: force Obama to move to the right of center view on tax reduction and deficit reduction and let him hang on the unpalatable political consequences of increasing poor population, cratered social services, dis-education and broken promises on health care.
Originally published as a comment on Baseline Scenario in response to Simon Johnson’s Why Can’t Europe Avoid Another Crisis? Why Can’t the U.S.?