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The Insiders
Posted at 11:46 AM ET, 12/11/2012

America, take heart: Fiscal reasonableness is out there

Reasonableness is out there. We just need facts and a plan, combined with modest political leadership, and presto!  We would avoid the “fiscal cliff” and maybe start a process that could produce real economic reform.  We can’t just pretend, as President Obama does, that we can go off the cliff and the results could be a net-plus.  Experienced hands in Washington recognize that each side must contribute if the negotiations are going to succeed. 

Those who think they can win by being deceitful aren’t seeing the bigger picture. If deceit wins, the loser isn’t the opposing political party — it’s all Americans.  Today’s taxpayers — and many future generations of taxpayers — have to pay the bills that others are hiding, denying or pretending don’t exist. 

I don't want to suggest that it will be easy. Everything easy to do in Washington has been done. But in today's reading, I ran across two articles that I think outline sensible, thoughtful, fact-laden approaches to the fiscal cliff negotiations and real economic reform.  

The first, by former World Bank president Robert Zoellick, makes a worthwhile contribution, offering a reasonable, step-by-step budget plan that no one will be completely happy with.  The fact that almost no one on either the right or the left will like it gives the plan instant credibility.  Zoellick lists six steps Washington should take to show its seriousness on addressing spending reforms: Progressively indexing Social Security payments, making changes to Medicare contributions, reexamining and addressing the costs of Obamacare, placing caps on discretionary spending, scrutinizing defense spending and limiting the increases on federal expenditures. 

The second, by Robert Samuelson, consolidates some compelling facts about our taxing and spending. Since the truth is a good place to start, studying Samuelson is a worthwhile endeavor that gives insights into how tax increases on the wealthiest Americans would simply result in a restructuring of how these Americans approach their usual economic activities.  Samuelson states that under Obama’s proposal, “As intended, the rich bear the burden of these increases.”  But he also notes that Republicans oppose this hike in tax rates to pre-Bush tax-cut levels because, as many economists agree, with lower tax rates, “individuals would still have incentives to work hard; they’d keep a higher percentage of any increase in earnings.  Similarly, small businesses — which often pay taxes at personal income rates — would have incentives to hire.”

Samuelson and Zoellick remind us that the facts are out there, a plan is out there — and inspired by the 1990s TV program “The X-Files,” we can believe that in the Washington version of the show, reasonableness is out there, somewhere.

By  |  11:46 AM ET, 12/11/2012

 
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