Sanders: Going Over 'Fiscal Cliff' Better than Bad Tax Deal

[unhappycamper]

http://www.commondreams.org/headline/2012/11/12-11



Senator says new Congress could recover 'in the first month or two'


Sanders: Going Over 'Fiscal Cliff' Better than Bad Tax Deal
- Common Dreams staff
Published on Monday, November 12, 2012 by Common Dreams

Sen. Bernie Sanders, I-Vt., said Monday that if the lame-duck Congress can't agree on a tax deal by the end of the year, briefly going over the "fiscal cliff" is preferable to accepting a bad deal.

“Is it better to deal with this issue in the next session rather than accept a bad agreement in this session?” Sanders said during a press conference at his Burlington office. "Yes, it is.”

The "fiscal cliff" refers to a package of severe tax increases and cuts to Social Security, Medicare and Medicaid set to automatically go into effect on Jan. 1.

Sanders said Republicans who support the plan are "way, way outside the mainstream," The Burlington Free Press reports.

[reformist2]

1. I'm convinced the "fiscal cliff" meme is just very effective Repug scaremongering.

Once it's out there, the obvious public reaction is "oh, no... we can't go over the cliff!!!"

My response? Oh yes we can!

[trouble.smith]

3. I just got a raise and I'd like to keep it. The wealthy have been doing quite well for a long time

It's their turn to pay up.

[HereSince1628]

6. It's not a cliff at all, it's a PIT TRAP

I first encountered pit traps as an undergraduate entomology student wanting to collect beetles and such.

Basically you dig a hole, and bury a mayonaisse jar or tin can so that it's rim is at or just below ground level...things that fall in can't climb up the steep walls.

To increase the likelihood of something falling in, you set up fences (usually boards) that guide the bugs to the brink of the trap.

Congress dug this pit, and the media are dutifully standing on the fences herding us toward the edge.

WHY? WHY after decades of raising the debt ceiling is it suddenly apocalyptic to do so again?

I think it's because things have changed for the international money masters who no longer are making most of their super investments in the US and Europe.

The easy money to be made is in developing economies but it requires investment capital. When the US (and other nations) sell bonds to raise money, they reduce the amount of international capital available for such investment.

My position is that the reason the eurozone and the US re being pushed toward austerity is because the international financiers don't want to compete with nations like the US for investment money

[tama]

7. REAL macroeconomics

Global "race to the bottom" of neoliberalism is an equalizing force, and as in terms or real economy consumption (basically energy per capita) the global situation is more or less zero sum game, the lion share consumerist OECD nations can do little else but cut consumption, while Chindia keeps on growing consumption. Hence "austerity" game of musical chairs, Greece etc. falling already on their arse while IMF is doing it's damnest to keep the last OECD chair for US.

So what about finance and money movements? It's all bollocks...

Representative government? When Carter spoke truth to people, they chose Hollywood B-movie actor. Sorry to say, but people get what they choose. To cut consumption or cry and moan and cut consumption to live within means.

Choices? Cut the bollocks of finance and artificial scarcity created by money and capitalist greed "ownership". This is still a world of abundance of more than plenty for all of us, build another world of mutual aid of fractally organic local-global communities.

[HereSince1628]

9. I find that "bollocks" while explaining everything explains nothing.

Sorry but content-wise I also find "mutual aid of fractally organic local-global communities" to be both ethereal and diaphanous.

[tama]

11. "Bollocks" as

make-believe, scam, power-fetish, bullshit-art, etc. Wankerism that does make you blind.

[greymattermom]

2. it needs a new name

something like The Republican Budget Deal. We can accept that, right?

[R. Daneel Olivaw]

10. The Republican Obstruction Budget Deal

[xchrom]

4. Du rec. Nt

[Ikonoklast]

5. Bernie gets it right. No Deal is better than a Bad Deal.

The Republicans know that they got badly outmaneuvered by Mr. Obama, and will be desperate for any deal to keep their billionaire owners happy...while Mr. Obama doesn't actually have to do one thing.

[Mnemosyne]

8. K&R

[gang]

12. no, my eyes

[forestpath]

13. Bernie is my hero.

[Jim Lane]

14. It's not a cliff but it is a problem.

The "fiscal cliff" (or the fiscal hillock, as Andrew Tanenbaum called it) is a combination of tax increases and spending cuts that would decrease aggregate demand at a time of unacceptably high unemployment. Under well-established economic knowledge that's accepted everywhere except among Republican politicians, the effect would be to impair any recovery and to worsen unemployment.

(Actually, even Republican politicians do accept this idea in part. When they're not busy denouncing Keynesian economics, they take time out to endorse it to the extent that it supports tax cuts for the rich. This was on full display two years ago, when the Republicans argued, correctly, that raising taxes during a downturn was generally a bad idea.)

Our real deficit problem is that the projected deficit for 2013 is too small. The government should be pursuing countercyclical policies, notably running a bigger deficit to stimulate the economy.

Sanders is right that we shouldn't accept a bad deal. The changes scheduled for January 1 would have the overall effect of increasing unemployment, but it's very easy to conceive of a "Grand Bargain" that would be even worse.

My personal guesses:
1) The eventual outcome will have the rich paying higher taxes than they do now, but still less than what they were paying before the Bush tax cuts expired.
2) The Republicans, as hostages to Grover Norquist, won't accept any such deal before January 1. It will have to be done after the rates go up so that the Republicans are voting to bring them partway back down, thus not voting for a tax increase.