Should the US go off the fiscal cliff?
And before we begin, let’s dispense with the disingenuous argument that this or that proposed solution won’t solve the entire debt problem. No single solution will do that. This year’s deficit is a record $1.4 trillion, and we simply do not have a $1.4 trillion line item in our budget. The largest single line item, Defense, is a paltry $728 billion, about half of the problem even if we took the insane action of completely eliminating the Defense Department. So criticizing proposals because they don’t single-handedly address the entire problem is just political Newspeak for doing nothing.
Even more interestingly, the very same politicians who pooh-pooh taxes on the rich resetting to their 1990’s levels because that alone doesn’t solve the problem are perfectly happy putting forward “solutions” like eliminating the Department of Education, which accounts for less than 1% of the Federal budget.
Let’s get real. We need to focus on solutions, and solutions will not be found in a single bumper-sticker answer because a single-line-item answer doesn’t exist. Also, I believe we should seek solutions that do the least possible harm to the most financially vulnerable among us, and to the nation’s economy. And solutions will have to include revenue increases after 30 straight years of slashing taxes. Solutions will also have to include spending cuts. We are currently spending at a rate the tax revenues would never be able to sustain.
As the chart in the link directly above shows, with all the tax cuts and special interest breaks Congress has bought our votes with, the US is now collecting just over 16% of GDP in taxes, the lowest revenue level since 1959. Of course, in 1959, we did not have Medicare or Medicaid. We did not have an unfunded prescription drug benefit.
The problem in looking at taxes is that virtually all GOP Congressional members have signed a pledge to Grover Norquist, the lobbyist in charge of Americans for Tax Reform. They have sworn to Grover they will never raise taxes, or even cut deductions without offsetting tax rate reductions. Presumably, if we are attacked again like we were at Pearl Harbor, we should just go down in defeat rather than raise revenues to pay to rebuild our tattered military.
Can a representative or senator reconcile their oath of office and the recitation of the Pledge of Allegiance with such a pledge to an unelected lobbyist? But that’s a separate question.
Still, given the Norquist pledge, GOP lawmakers might refuse to negotiate any deal with Democrats unless it is revenue neutral and balances the budget on the backs of the poor and the middle class. The GOP insists the Defense Department budget is off the table. In fact, they want to increase defense spending.
But we could just go off the cliff. Then those same GOP lawmakers could cut taxes back to their current rate for 98% of Americans and 97% of small businesses. This wouldn’t involve reneging on their pledge to the almighty Norquist. And even Grover knows that after Obama’s campaign promises to the voters who elected him, the President will not likely sign a tax cut for the top 2% into law. So is the cliff all that frightening? Perhaps we should view it as a perfect way out. What say you?