| The US is going off the "fiscal cliff." Yes, the world is coming to an end. Again. |
| Of the two ends of the fiscal spectrum -- stimulus vs. austerity -- President Obama has nudged the US towards the former, while most of Europe has gravitated towards the latter.
In the US, a series of stimulus measures are coincidentally timed to come to an end on January 1, 2013. The culmination of these bills has become known as the "fiscal cliff." If they are allowed to expire, their expiration will push the US back towards the austerity end of the fiscal spectrum. Republicans are willing to allow this to happen because their philosophy is one that generally favors the austerity end of the spectrum. Their excuse for allowing these austerity measures to be enacted is that they don't want to raise taxes on the very wealthy. This is a politically tenuous position in light of the results of the 2012 presidential election. It is our position that the president should hold firm and insist that the only stimulus initiatives that should be retained are the ones that benefit the "middle class" according to the president's definition, which means households earning less than $250,000. (A very generous definition, in our opinion!) While the middle of a recession may not be the best time to enact austerity measures, surely setting US tax rates back to where they were in the 1990's would not constitute a "fiscal cliff." It would in fact, make the tax system more progressive which, while potentially causing brief economic discomfort in the short run, would be better for the nations long term economic health. The fact is that we have been underpaying for government services (including two foreign occupations and a Medicare Part D drug benefit that pays open-ended drug prices) for over a decade. Going over the "fiscal cliff" is simply the first clumsy lurch towards adjusting that discrepancy. |
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