By now, you've seen and heard more than you want to know about the fiscal cliff that will confront America in seven weeks. You'll also be hearing voices on both sides calling for compromise in negotiations. Don't buy it.
There seem to be many dimensions to the issue, but the most important is tax rates. R's say they want to raise revenues (taxes) by eliminating loopholes, but they have drawn a line in the sand against raising tax rates themselves. D's say they want to raise revenues by closing loopholes AND raising taxes on the top few percent. Both R's and D's want to trim spending, but in different ways. R's want to cut Social Security, Medicare, Medicaid and Obamacare, while increasing defense spending. D's want to cut defense spending, and will accept some belt-tightening in other areas.
The Republican position of no tax increases, even for the wealthiest Americans is a non-starter. If Boehner & Co., truly do draw a line in the sand on that, I say, "Choose the cliff."
"Choosing the cliff" will raise badly needed revenues, restoring our tax system to how it was before the insanity of George Bush. It will bring welcome reductions to our outrageous spending on wars and arms, without jeopardizing our ability to defend ourselves in the slightest. These are good things, but though there are downsides as well. As Europe proves every day, austerity economics is a recipe for disaster.
It will be tempting for D's in Washington to believe that R's will compromise and negotiate in good faith. But if there's one thing we've learned over the past four years it is this: R's will not compromise and negotiate in good faith.
The creation of the "fiscal cliff" was a drastic response to a unsustainable situation, a compromise of sorts, reached under duress. Unless D's can get a better compromise that restores tax rates on the highest income earners to pre-Bush levels we should stick with the deal that's on the table. If that takes America into another recession, so be it. That recession would ignite the full fury of class warfare that has been smoldering for the past few years.
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