Deficit debate driven by the wealthy
The Simpson/Bowles plan bills itself as a road map to deficit reduction, but it's really a guide to cutting services and benefits for the working and middle class while protecting the interests of the wealthy.
There must be a reason that every time I hear the term "fiscal cliff," the image that comes to mind is of Wile E. Coyote pumping his feet in midair just before plunging into the valley below.
Is it that the debate over when and how to cure the federal deficit has reached new heights of cartoonish inanity? That we are now being treated to finger-wagging about the need to get our fiscal house in order by corporate CEOs like JPMorgan Chase's Jamie Dimon (trading loss $5.8 billion and counting, potential cost to ratepayers from alleged manipulation of the California electricity market $200 million and counting).
Or is it that the remedies for the deficit always seem to involve cutting taxes for the top 1% of U.S. income earners while cutting Social Security retirement benefits (average monthly check: $1,230) for everyone else?
All of the above, probably.
But let's get serious for a moment. The fiscal cliff is supposedly what lurks at the end of this year, when billions of dollars in tax cuts expire and government spending cuts mandated by the big deficit deal in 2011 kick in.
According to the bipartisan Congressional Budget Office, the combination of a steep increase in the tax bite and a steep reduction in spending across the board could cut economic growth in 2013 to 0.5% from a projected 4.4% (if none of these events takes place). The CBO says that by any traditional reckoning, that would mean recession.
