Dec. 12th, 2012 09:18
Repeal the "fiscal cliff"
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cos[I also posted this on Blue Mass Group]
We hear a lot about Congress and Obama working to find some elusive deal that could stave off the "fiscal cliff", and occasionally we also hear about why we should to avoid it: According to the Congressional Budget Office, allowing the "cliff" to happen is likely to send the economy back into recession in 2013, and sharply increase unemployment.
What we don't hear much about is that Congress can simply repeal the fiscal cliff, without any complicated deals.
"Sequestration" - the automatic spending cuts that start to take effect in January - is just a law passed by Congress in 2011. Congress can repeal it, and that alone would be enough to prevent a recession in 2013 according to the CBO report - even if all the Bush tax cuts expire.
Extending the payroll tax cut and unemployment benefits would double the impact. Extending the Bush tax cuts on income below $250,000 would do even more (In contrast, extending the Bush tax cuts on higher income would, according to the CBO, have very little impact). But even if we did neither of those sensible things, just repealing sequestration would be much better than doing nothing. Neither Congressional Democrats nor Republicans actually like sequestration or want it to happen. So why do we hear so little in the news about that option?
I started a petition on change.org: Congress: Repeal the "fiscal cliff".
Please sign, re-post it, and send it on to others.
We hear a lot about Congress and Obama working to find some elusive deal that could stave off the "fiscal cliff", and occasionally we also hear about why we should to avoid it: According to the Congressional Budget Office, allowing the "cliff" to happen is likely to send the economy back into recession in 2013, and sharply increase unemployment.
What we don't hear much about is that Congress can simply repeal the fiscal cliff, without any complicated deals.
"Sequestration" - the automatic spending cuts that start to take effect in January - is just a law passed by Congress in 2011. Congress can repeal it, and that alone would be enough to prevent a recession in 2013 according to the CBO report - even if all the Bush tax cuts expire.
Extending the payroll tax cut and unemployment benefits would double the impact. Extending the Bush tax cuts on income below $250,000 would do even more (In contrast, extending the Bush tax cuts on higher income would, according to the CBO, have very little impact). But even if we did neither of those sensible things, just repealing sequestration would be much better than doing nothing. Neither Congressional Democrats nor Republicans actually like sequestration or want it to happen. So why do we hear so little in the news about that option?
I started a petition on change.org: Congress: Repeal the "fiscal cliff".
Please sign, re-post it, and send it on to others.
no subject
> Also, why would repealing *spending cuts* make our financial situation better? Wouldn't that make things worse, spending more money we don't have? <
I really should write a much longer post about this, but the short version is that you along with a LOT of the country have been fooled by all this talk of deficit and debt into believing that deficit and debt is our economy's problem, when it in no way is. While there are some possible longer term problems that can be caused by *growing* budget deficits (which we don't have - ours has now shrunk four years in a row), poor performance of an under-capacity economy is not one of them. It's just the opposite: the only good way to get *out* of a weak under-capacity economy is by spending more. Spending more is in fact exactly what we need to do now.
Money we most certainly do have. It is impossible for the US government to run out of money; it has as much money as the Federal Reserve wants it to. Making more money does devalue all money of the same currency, but that's not much of an issue when it comes to the US and dollars (something I'd explain better in a longer post) and it's *certainly* not a short term problem, or something bad for the economy. More money would be great for our economy right now, and decrease unemployment, so in fact that's just what the Federal Reserve has been doing for several years in a row: vastly expanding the amount of money available. However, the most effective use for all that money would be direct government spending, and thanks to the Republicans, our government is not spending nearly enough. That's why the recovery is so slow.
As the CBO report I linked to makes very clear, repealing the spending cuts would be a big help to the economy in 2013 (an alternate way of saying that letting these cuts happen would be a big blow to the economy in 2013).