Fiscal Chicken

tea party caucusTalk show hosts and other bloviators have spent hours giving their versions of the fiscal cliff.

In fewer than 750 words, I’ll explain the truth.

Taxes and the deficit are intertwined. If Congress can’t come up with a plan to solve those problems, the U.S. will jump into the abyss of a deeper recession than existed under the latter years of the Bush–Cheney administration.

Let’s first look at taxes.

The Bush tax cuts expire at the end of this year. The idea of the cuts was to spur the economy and give what is loosely called the “jobs creators” a slight push to hire more people.

But, the millionaire “jobs creators” held onto their money. They continued to downsize and outsource jobs, making even more money—which they used to buy whatever trinkets that rich people spend money on.

If Congress can’t agree on tax rates, beginning January 1, 2013, every American will see a restoration of tax rates to a level that is about what they were before the Bush tax cuts. The lower- and middle-classes will be hit harder than the upper class.

President Obama, contrary to what the screaming harpies of the extreme Right wing claim, doesn’t want to raise taxes. He wants the tax cuts to continue for 98 percent of all Americans—the ones making less than $250,000 a year. He wants to restore—note that word, restore, not raise—the tax liability for the richest 2 percent of Americans. The rate to the rich would still be below the rates they paid during most of the latter half of the 20th century. Even billionaires like Bill Gates and Warren Buffet agree that the rich need to be paying more.

The Republicans, knowing where their financial base is, demand that the tax cuts be extended to everyone. Their compromise was to allow the cuts to apply to everyone making $1 million a year or less. That would be net income, not gross income. Millionaires could still make $3 million a year if they can scam $2 million in deductions. Their rates would still be lower than almost any time since the income tax was first created in 1913.

The President countered with a $400,000 limit. That would include about 99 percent of all Americans. House Speaker John Boehner, however, found that a segment of his Republican party don’t want a compromise; they are determined to uphold some kind of a non-legal pledge to Grover Norquist that there would be no tax increases—ever—even if it is to restore, not raise, tax rates.

The second part of the problem is that of entitlements. The Republicans are willing to do some horse-trading. They won’t continue to hold 99 percent of Americans hostage if there are cuts in “entitlements” and programs that would significantly reduce the deficit. These entitlements benefit mostly the 99 percent. The Republicans even say they’ll consider closing some tax loopholes used extensively by the upper class. But, they won’t tell us what those loopholes are, even though the President has several times asked for specifics. Apparently, the Republicans believe releasing such information is classified, much like battle plans in Afghanistan or the number of toilet paper rolls the Pentagon buys.

The President has already compromised several times, but every time he makes a concession, the Republicans want even more. He has proposed an orderly reduction of the deficit by $1.6 trillion. Not good enough, say the dogma-driven Republicans. They want even more. And they want it now. They are aware that if the tax cuts expire all at once, the deficit immediately decreases, something that makes them drool in ecstasy. However, almost every economist of every political persuasion says a severe decrease in the deficit would lead the U.S. into an even worse recession than the one created by the Bush–Cheney administration.

Behind a wall of political gesturing, the Republicans are doing nothing, while blocking those who can do something. John Boehner now acknowledges he is blocked by party dogma and can’t control the Republican majority in the House who want the government to several cut entitlements while continuing all Bush tax cuts, even to millionaires who, not surprisingly, make up the majority of Congress. Their actions are driving America into fiscal cliff suicide.

walter braschThe obstructionists in Congress need to realize this isn’t a deserted two-lane highway, and Americans don’t want the Republicans playing chicken with our nest eggs.

Walter Brasch
Wanderings

Thursday, 27 December 2012

Published by the LA Progressive on December 27, 2012
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About Walter M. Brasch

Walter M. Brasch, Ph.D., is an award-winning journalist and author. He is a former multimedia writer-producer, newspaper and magazine reporter and editor, and is professor emeritus of mass communications from the Pennsylvania State System of Higher Education. His latest book is Fracking Pennsylvania, which looks at the health, environmental, geological, and economic impact of natural gas horizontal fracturing. He also investigates political collusion between the natural gas industry and politicians. Among his 18 books--most of which integrate history, politics, and contemporary social issues--are The Press and the State, Before the First Snow: Stories from the Revolution, Sinking the Ship of State: The Presidency of George W. Bush, The Joy of Sax: A Look at the Bill Clinton Administration, and Social Foundations of the Mass Media.
He is also the author of dozens of magazine articles, several multimedia productions, and has worked in the film industry and as a copy writer and political consultant. He is the author 16 books, most of them focusing upon the fusion of historical and contemporary social issues, including America's Unpatriotic Acts: The Federal Government's Violation of Constitutional and Civil Rights (2005); Sinking the Ship of State: The Presidency of Geroge W. Bush (2008), Black English and the Mass Media (1981); Forerunners of Revolution: Muckrakers and the American Social Conscience (1991); With Just Cause: The Unionization of the American Journalist (1991); Brer Rabbit, Uncle Remus, and the 'Cornfield Journalist': The Tale of Joel Chandler Harris (2000); The Joy of Sax: America During the Bill Clinton Era (2001); and Sex and the Single Beer Can (3rd ed., 2009). He also is co-author of Social Foundations of the Mass Media (2001) and The Press and the State (1986), awarded Outstanding Academic Book distinction by Choice magazine, published by the American Library Association.