The Cycle | December 12, 2012
>> every day we are closer to the fiscal cliff .
>> solving our fiscal challenge we have now.
>> the country goes over the fiscal cliff .
>> stop the insanity!
>> susan pouter back on the show. the end to the fiscal insanity not any time soon. an infinite loop is on the horizon. matt miller is here to explain his endless cliff hypothesis. ech for short. i want to get to the hypothesis, but we want to start with the state of play . a couple of things are bubbling up. the first is this. there has been talk about if there is going to be a deal, what obama would be willing to give to the republicans on entitlements and medicare and social security . there is push back saying you better not be raising the eligibility age. he was pointedly asking if that was something he would consider. he refused to rule it out. he would not rule it out in the entry. i'm wondering how nervous do you think right now progressives should be about the idea of the medicare age going up in any deal.
>> i guess i don't think progressives should be nervous at all. it's not clear he is going to agree as part of the deal because of the push back and all the analysis that is coming out that shows it doesn't save any money in the near term and shifts money from one pocket of the health care system to another. it might increase national health cost fist people 66 or 67 have to go into the regular system and get subsidized under obama care. the thing that no one talks about isabout raising the eligibility age under simpson boelgz that proposed that, it doesn't phase in the higher age for like 30 or 40 years. if that's what boehner and the republicans are talking about, people shouldn't jump out of their chair over that. in 30 or 40 years, people may be living to 100. we will revisit this and if that ends up being a cosmetic give that would grease the wheels for a deal and doesn't phase in for two decades, i don't think they should have a big worry about that.
>> another moving piece is stimulus. there is a report from sam stein who said the white house made an initial offer and asked for a modest stimulus. i think it's the interpretation of most people is that there is their pie in the sky . if we get everything they wanted, the white house said no, this is more of a bottom line demand. any deal reached has got to include a stimulus. you have the fed coming out saying they will be doing $45 billion to offset some of the potential impact. are you optimistic it will be included in a deal if is reached?
>> i hope the president holds firm because people need to realize the debt is not a near term problem. the massive unemployment and sluggish growth is the ek noomic problem. we need more stimulus and the idea that he did what he did, making these extraordinary commitments that you keep interest rates low from unemployment for the first time. it is going to be until unemployment is below 6.5%. we can't let the one unelected guy be responsible for carrying the weight of trying to boost demand in an economy that is reeling and coming out from under that epic bubble that burst a few years ago. the president should hold firm on stimulus and the republicans will fight that every step of the way.
>> we're have been debating in particular about the debt ceiling and how much leverage republicans have there and i understand because i read your column today that you have a plan for how the president could handle the debt ceiling negotiations and be done with it for now.
>> yes. my first choice would be as you know, we talked about this before. i would go the constitutional option like bill clinton suggest and say this thing is unconstitutional. ork bama seems to have ruled that out. if he's not going to, he has to reframe the debate. i think the most powerful way to do that is to expose the hoax at the heart of what the republican debt limit argument is. they make it sound like the debt limits, the only way to stop socialist obama from drowning us in debt when obama should say what we should do is raise the debt limit by the amount needed to accommodate the debt that every republican voted for in paul ryan 's budget plan last year. this is something people don't understand. the press doesn't widely appreciate this. the ryan budget that all the republicans voted for adds about $6 trillion in debt. ryan may say that's better than the 7 or $8 trillion in obama 's budget, but lifting the debt ceiling is not about shrink the debt in a rapid way and exposing that hypocrisy. that's the only way that obama can turn public opinion. we come talk about it and if obama made it a staple in the next few dis, it would be the center of media coverage and neutralize the republicans on this.
>> a lot of people say politics is hollywood for ugly people. if you see the reaction on the screen, that's not entirely true. there is a way that this fake drama is real and becomes a way to put the guys on screen and more often and get them more screen time. make them seem to have an urgency they wouldn't have if they didn't have the thing going on. that part of the psychology is going on when you talk about the cliff negotiations that you are saying we are going to have. we want to seem urgent and be on tv all the time. this is a way to create the urgency in the business.
>> i had not thought of that. i understand there is a lot of narcissim and ego as in hollywood, but the idea that they would be inflicting a self-induced recession on the country just to get a little more air time , i have to say that's beyond the depth of cynicism and self involvement that i would credit our leaders with. i do think almost by accident because of the way we got this polarized stuff that you guys would talk about and the republicans feel like they got elected from the majority districts and they won the election, we are at risk of entering what i call this perfectly dysfunctional political equilibrium that perpetuates itself and we may ride from cliff to cliff . even if they do some deal a couple weeks afterwards, it would be a bridge deal that lays out a framework for where we are going to go and sets up another cliff with serious consequences to follow if they don't make the deal. if they don't and the politics won't let the bigger deal come together now, what will change in six months that let it come together then and we could end up rolling for cliff to cliff with no end in sight. i know that makes you guys happy.
>> no. end the suspense for me and steve and crystal and alleviate trey's boredom and tell us how the story will end.
>> i wish i knew the answer. my wife thinks i'm an optimist and thinks it's higher is serotonin. think about the politics and so many moving pieces. all this conversation now about the deals that we are talking about and the boundaries are so narrow and nowhere equal to what we need to do. we top the keep america solvent and the advanced government should do. we need to renew the country and we are not even close to talking about that. you can make it very pessimistic even for this higher is serotonin optimist that we are entering a bad period for the u.s. and unless our folks coming to and get their act together.
>> a lot of energy and time devoted to an artificially created crisis. matt miller , thanks for joining us. next, have you sent your holiday cards yet? if not, you are not alone. why more americans are taking a pass on