A Dishonest Start

President Obama addressed the issue of the fiscal cliff today in a short statement from the White House. After talking about the need for action, Obama actually said this:

Now, already I’ve put forward a detailed plan, that allows us to make these investments while reducing our deficit by $4 trillion over the next decade. I want to be clear, I’m not wedded to every detail of my plan. I’m open to compromise. I’m open to new ideas. I’m committed to solving our fiscal challenges, but I refuse to accept any approach that isn’t balanced.

Obama went on to say that he would insist on raising taxes on those making more than $250,000 as part of any deal.

Here's the problem: there is no detailed plan like Obama claims. There is just a general outline in some speeches of a supposed plan. His $4 trillion is made up out of fantasy items. For example, Obama claims a trillion dollar savings because the wars in Afghanistan and Iraq are over. Of course, the problem is that Iraq ended long ago so there is no money in the budget for that item. Further, Afghanistan is slated to end in 2014, so there should be no money in the budget for that war after that date. It is a lie to claim that there will be savings by not spending money that is not supposed to be spent in any event. Obama also claims some other items like saving on interest expense. Since we won't have to borrow money for the wars on which we are not going to spend anyway, Obama claims that the interest on the money that we do not borrow is another savings.

So we are back at the point where Obama is demanding tax increases on job producers and John Boehner is saying that the GOP will not agree to such increases since they will hurt the economy. It is not a good start. We will probably see another last minute deal, but it will just be the sort of thing that will lower the public esteem for the government (if such a thing is possible).