What exactly is this “fiscal cliff” that Obama denies exists but Conservative economists are warning that Obama is about to drive us over? He says it isn’t there. His GPS (Government Prognostication System) says it isn’t there. But he’s in the driver’s seat and relegated us to the back seat. Thanks to a bunch of free-loading voters, his presidential driver’s license was renewed.
Years ago, driving in San Francisco, I came to the top of one of its famous hills. The hood of the car was pointed skyward – there was no road left and I couldn’t see the crest of the hill under the car. It’s like that moment when the roller coaster car reaches the apex and then with a stomach-turning plunge, you find yourself flying helplessly down the other side.
What will happen to our economy when we reach its apex? Will we plunge down the other side into a recession or even a depression? Or will we, like Wiley Coyote, fall straight down to the bottom of the fiscal canyon?
Investopedia’s website describes the “fiscal cliff” this way:
“A combination of expiring tax cuts and across-the-board spending cuts scheduled to become effective Dec. 31, 2012. The idea behind the fiscal cliff [is] that if the federal government allowed these two events to proceed as planned, they would have a detrimental effect on an already shaky economy, perhaps sending it back into an official recession as it cut household incomes, increased unemployment rates, and undermined consumer and investor confidence. At the same time, it was predicted that going over the fiscal cliff would significantly reduce the federal budget deficit.”
Investopedia says that if Congress does “not avert this perfect storm of legislative changes, America will ‘fall over the cliff.’ Among other things, it will mean a tax increase the size of which has not been seen by Americans in 60 years.”
“The Tax Policy Center reports that middle-income families will pay an average of $2,000 more in taxes in 2012. Many itemized deductions will be phased out and popular tax credits like the Earned Income Credit, Child Tax Credit, and American Opportunity credits will be reduced. 401 (k) and other retirement accounts will be subject to higher taxes.
“Your marginal tax rate is the tax you pay on each additional dollar of income you earn. As your income rises, your marginal tax rate (better known as your tax bracket) rises. For 2012, the tax brackets are 10%, 15%, 25%, 28%, 33% and 35%. If [Congress] does not act, those rates will go up respectively to 15%, 28%, 31%, 36% and 39.6%.
“In addition, the Congressional Budget Office estimates that 3.4 million or more people will lose their jobs. The October 2012 unemployment rate of 7.9% represents significant improvement over the October 2009 rate of 10%. The Congressional Budget Office believes that up to 3.4 million jobs would be lost, post fiscal cliff, due to a slowing economy with layoffs stemming from cuts in the defense budget and other things. This could result in an increasing unemployment rate
Obama says he only wants to raise taxes on the wealthy, not the middle class, without cutting spending. His policy would do nothing to reduce the deficit. Speaker of the House John Boehner says he wants to find bipartisan common ground with the Democrats. How cutting spending would be an economic disaster for the nation is something of a mystery.
Cutting foreign aid to terrorist nation-states rather than to our military would go a long way towards reestablishing our credit credibility. Cutting corporate tax rates would create more productive jobs than the government could produce, or mitigate. Cutting government bureaucracy on every level would lower our deficit considerably. Cutting generous union health care and retirement benefits would enable more taxpayers to buy their own health insurance, rather than depending on the vicissitudes of an employer and the economy.
Instead, insolvent Americans elected an economic terrorist as president who’s playing chicken with our economy in order to get his way. He’s set his GPS to the United Socialist States of America. There’s a huge gulf between the United States of America and the United Socialist States of America, but he’s willing to gun the engine and take the chance, a la Evel Knievel, to get us to the other side, from which there will be no returning. Interfere with his Machiavellian plans, dare him, defy him, and he’ll gladly crash the car into the chasm below.
What does it matter, now? He’s a second-term, lame-duck president with an obliging, boot-licking House of Representatives. He can do whatever he wants. Which is what he pretty much did throughout his first term.