Posted: Sat Oct 27, 2012 10:58 pm Post subject: Meet the fiscal cliff-divers ...
Are they going crazy? The Americans, I mean ...
Meet the fiscal cliff-divers, who think jumping off could be our best bet
The very notion of a “fiscal cliff” suggests that the country is approaching a calamitous drop-off at the end of the year — and it would be tantamount to suicide to jump off.
Colombian cliff diver Orlando Duque launches off a 78-foot rock peninsula in La Rochelle, France. (Dean Treml/AFP-Getty Images)
But a contingent of policy wonks and Democrats insist that letting the Dec. 31 deadline come and go — thus triggering automatic tax increases and spending cuts — could produce the best outcome for the country. Once the tax hikes have kicked in, the reasoning goes, Republicans would be hard-pressed to roll them all back and would have to accept a deal on taming the deficit that contains more new tax revenue than GOP lawmakers want.
So some policy analysts and legislators say they are willing to go over the brink—and some are even gunning for Congress to do it.
Call them the cliff-divers.
“It will be much easier to negotiate a budget deal going over the cliff,” said William Gale, an economist at the Brookings Institute and former adviser to George H.W. Bush. “It seems to be the only way we can boost revenues.”
“The willingness to go over the cliff is a means to force a deal,” said Matt McAlvanah, a spokesman for Sen. Patty Murray, the fourth-ranking Democrat. In July, Murray said she would rather push the debt debate into next year rather than reach a deal “that throws middle class families under the bus.”
This is truly frightening! For those who haven't heard of the 'fiscal cliff', it refers to a the expiry of a set of tax and cut policies. With the Bush tax cuts, for example ... Congress passed the legislation required, and added the proviso that the law would 'expire' as of a certain date. Another Congress could and did keet it in place until another 'expiry' date.
Another case was the deal rung up when the debt ceiling was raised. Those provisions, trading off tax increases against cuts in expenditures -- including big cuts to defense -- but not to start until the end of this Congress.
There are other issues involving Obamacare ... The point is that the shock of all these policy changes, coming at once, will likely cast the USA into a depression.
There are two frightening aspects of this. First. a peculiarity of the US system is that while the election is in early November, the old Congress and the old President continue to preside until Innaugeration Day in early January.
Second, what is particularly is scary is that Democrats must be thinking of letting the US go over the fiscal cliff as a result of losing the election. They know that, but think it is a small price to pay ... because it would put huge pressure on the Republicans to agree to increase taxes more, and cut expenditures less.
I don't think they would do that if they thought they would retain the Presidency.
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