The “fiscal cliff” is gonna get us if we don’t watch out. PostScript enjoys the vague sense of dread engendered by the phrase, but she is anxious to find out if “fiscal cliff” is a scary enough term for the government to do something about it. If not, some worse labeling will have to be implemented, and we might be facing the “Terrible Death Fiscal Squid.” It could happen.
But Ruth Marcus takes the presaged event seriously, even at its current “cliff” status. In her column today she argues that President Obama is in a position to call the bluff of the House Republicans should they balk at raising tax rates. That’s because, if no agreement is reached at cliff time, tax rates are set to rise anyway, as we’re plummeting off the edge.
Jayjordan backs up Marcus’s point regarding the game of cliff-chicken:
If nothing is done, the Bush tax giveaways disappear and we go back to where we were before the wilderness years. So what is the GOP bargaining position? “Give us what we want or.... what we want will come to an end by itself”?
OhMy actually thinks that calling the bluff (BLUFF IS ANOTHER WORD FOR CLIFF!) would work out politically for . . . everyone.
The Republicans have the most to lose if the tax cuts expire without any changes. Once the tax cuts are gone everyone will have to fight to replace them. So many Republicans have signed The Pledge to Grover Norquist that they won’t increase taxes, but if Republicans allow the tax cuts to expire perhaps this is their way of acknowledging the folly of the Norquist pledge. Taxes will rise without any individual Republican having to take responsibility for breaking his pledge.
ODKoik thinks the Republicans could spin that intransigence is in fact good for the country:
The obstruction has led to a mild recovery, no?
But we would all be dead and smashed at the bottom of the cliff, right? Flyover22 says we’re heading there no matter what happens bluffwise:
DUH, Ante up or not, the cliff is there. Whether the Bush Tax cuts expire or Obama just socks it to the rich, taxes go up and money is removed from the economy. The ObamaCare taxes start, which impact the rich by 3.8%, and all with higher drug and medical equipment costs. The Obama tax cuts expire though no one talks about that. The remaining stimulus spending stops (it got us through the reelection as intended.) The yearly structural debt spending remains, adding $125B per month to the deficit, and the interest, though low, continues to remove funding from other uses. The loss of jobs, declining economic activity and debt remains.
The drama makes good news print and it is good or bad politics depending on your side, but the fiscal cliff remains.
lmmbham has an idea for cutting government spending significantly:
Meanwhile, the Institute of Medicine, the medical arm of the Nation Academy of Sciences, says that the federal government overspends $500 billion each year on the medical services it provides. So why are we talking about raising taxes and reducing government services when we are already leaving so much money on the table?
Which intrigued PostScript to the point that she unfortunately googled this study, and she thinks lmmbham is talking about this, which says the medical industry in general, worldwide (not the government) could cut costs $500 billion mostly by changing behaviors of doctors and patients.
saneSpeech has a plan involving compromise, so this is the last we’ll hear of it:
Tax rate on top earners back to 40%. Entitlement spending cuts at a 2.5:1 ratio with tax increases. That mean 2.5x more cuts in entitlements than tax increases. That’s the deal the GOP needs to get its silly head around.
Crisis averted! Luckily we never have to find out what happens when you shut yourself in the bathroom with the lights off and say “fiscal cliff” three times to the mirror.