Cliff Diving to Reality

So fellow LC’ers, how’s your repelling skills? I ask that because it seems we are going to go over Cliff Obama. Now while I believe we could have won this entire economic battle, that would have required GOP leadership with spines who would have preempted the Democrat messaging machine. That was wishful thinking. The only way to win now (aka saving the Republic) is to put on your repelling harness, tie off the rope and let Obama own the pain this will bring.

To be honest, the fact that so many people – who are actually victims of leftist philosophy – don’t feel the pain is why Obama got voted back in. Professor Jacobson at Legal Insurrection talks about this in a post today:

I have written several times about the implicit marginal rate which makes it economically irrational for a  poor or lower-middle class wage earner to make more money because of the loss of government benefits the higher income incurs.

Back in November 2009, I saw the government benefits trap as a key political tool for Democrats, 100% Plus Taxation Key To Permanent Dem Majority:

In addition to all the other problems with highly subsidized, income-tested health care benefits, will come an even more permanent underclass which, being economically rational, will choose not to earn another dollar rather than lose more than a dollar of benefits.

Conservatives often speak of the Obama-Pelosi-Reid axis as seeking to create a permanent Democratic majority through big government handouts. This implicit marginal tax analysis shows that it is much worse than it seems; the permanent big-government majority will not be there by choice, but by government-created economic necessity….

A permanent, Democratic-voting majority living off government benefits with no way out. It really is that bad, and this really is a once-in-a-lifetime chance for the Democrats to achieve a permanent, economically-enslaved majority.

This chart I posted showed that the problem, implicit marginal rates in excess of 100% for wage earners moving from $30,000 of income to $50,000 of income:

please read the entire post

What is interesting about the Obama Cliff is that it undoes some of this economic dichotomy because the credits that promote the necessity of being poor will decrease. In effect a much wider population will actually feel how bad our economic situation is. That is good. The economic situation it creates isn’t – and that is where the GOP better step up and actually work on some real messaging. We need to show people that it is Democrat policy that put them there and that conservative principles are what can help make their lives better. I don’t assume the GOP leadership will do that, but I believe this is where the TEA party is effective. TEA party spawned groups like Freedom Works and others can do what the establishment won’t. We can expand TEA party type conservative membership by appealing to people who are newly affected by the Obama cliff fall. I’m looking at this as an opportunity.