Let’s Walk Off the ‘Fiscal Cliff’ — It Won’t Hurt
Fiscal Cliff? Sheer hyperbole foisted upon us by top earners who so fear the tax rates from the greatest economic boom in my lifetime. A time when IT was making so many millionaires, it was like a factory. A time when labor could shop jobs like an extreme coupon homemaker. Taxmageddon? Surely such an awkward word being coined brands the speaker more of an advocate than careful thinker.
Please don’t think me insensitive to those whose income is so low that a few percent more tax hurts. That pain will ease as jobs come back. Raises start to happen when we have growth and that’s coming. Sure we might have a brief decline or a small recession. However, we have to think long term. Short term is how we got where we are. A healthy national economy long term is what puts us in a position to save money and buy what we need.
The following excerpt is from the LA Times Opinion section. I will just quote a few highlights, do read the whole thing. It does a great job of illustrating why we need to stop listening to the selfish short-term thinkers that ply themselves as leaders and pundits.
The only thing to fear is the fear mongers. They persuade our most gullible far too easily.
In February 2003, 450 economists, including 10 of the 24 living Nobel laureates in economics, made a public plea to President George W. Bush not to enact the recent tax cuts passed by Congress. These tax cuts, officially called the Jobs and Growth Tax Relief Reconciliation Act of 2003 but forever known as the Bush-era tax cuts, would not do what they promised, the economists argued. Instead, they said, the cuts would “worsen the budget deficit, increase inequality, decrease the ability of the U.S. government to fund essential services, while failing to produce economic growth.”
Am I missing something here? Can letting a failed tax policy die be such a bad thing?
Not really, says the Congressional Budget Office. In fact, if we let these tax rates expire, the debt would rise but the increases would be reduced by more than $7 trillion, or 70%, over the next 10 years. This reduction in the deficit would happen so fast, the CBO writes, that the gross domestic product could slow in the first six months of 2013 to 0.5% — probably causing a recession — before catching its breath in the second half of the year and starting to return to a respectable 2.4% growth.
Here’s another idea: Let’s join hands and walk to the bottom of the cliff together. It’s not very far down. The deficit and national debt will be reduced; Social Security, Medicaid and, for the most part, Medicare will go on unharmed; America will go back to tax rates that worked better than the cuts we’ve been living with; and Congress will actually be forced to do something for a change: Republicans and Democrats will have to work together to repair those programs damaged by sequestration, rather than filibuster or chant talking points to make their way around the hard decisions.
Perhaps America is on the brink of a fiscal opportunity.
Jack Shakely is president emeritus of the California Community Foundation.