We've been hearing a lot about the so-called "Fiscal Cliff" in recent days. Many people are confused as to what it all means.The following is the essence of an email sent to me by MoveOn.org, a civic action group, the purpose of which is to inform the confused and uninformed or FAUX News informed as to the "Fiscal Cliff."
"Republicans, led by House Speaker John Boehner, want to scare Americans into accepting yet another extension of the Bush tax cuts for the wealthiest 2% and deep cuts to Social Security, Medicare, and Medicaid. So they've created a 'fiscal cliff' boogeyman.
"Unfortunately, if you're following the media story, you may believe Republican claims that the world's about to end. But the only thing going off a cliff on December 31 is the ability of the Republicans to hold our economy hostage for the sake of the rich ...
"That's why we have to spread the truth, so that our friends and family don't fall for the Republican myth about the fiscal cliff. We've put together a 5-point guide on what this fiscal showdown is really all about."
1. The "Fiscal Cliff" is A Myth. As Paul Krugman put it, "The looming prospect of spending cuts and tax increases isn't a fiscal crisis. It is, instead, a political crisis brought on by the G.O.P.'s attempts to take the economy hostage." Republicans are manufacturing this crisis to pressure Democrats to extend the Bush tax cuts for the wealthy and accept painful cuts to Social Security, Medicare, and Medicaid.
2. The Bush Tax Cuts Finally End December 31. If Congress does nothing, the ax will fall on all the Bush tax cuts on New Year's Eve. Then, on January 1, the public pressure on John Boehner and House Republicans to extend the middle-class tax cuts (already passed by the Senate and waiting to be signed by President Obama) will become irresistible. So the middle-class tax cut will eventually get renewed, and we'll have $823 billion more revenue from the top 2% to do great things with.
3. The Sequester. The sequester is another political creation, forced on Democrats by Republicans in exchange for lifting the debt ceiling last year to avoid crashing our economy. It's a set of cuts (50% to a bloated military budget and 50% to important domestic programs) designed to make both Republicans and Democrats hate it so much that they'd never let it happen. And the cuts can be reversed weeks or months into 2013 without causing damage.
4. The Big Three. Nothing happens to Social Security, Medicare, and Medicaid benefits on January 1--unless Republicans force painful cuts to beneficiaries in exchange for tax increases on the wealthy, which are going to happen anyway if Congress does NOTHING. So, there's literally no reason benefit cuts should be part of the discussion right now.
5. We Should Be Talking About Jobs. The real crisis Americans want Congress to fix is getting people back to work. And with just a fraction of that $823 billion from the wealthiest 2%, we could create jobs for more than 20,000 veterans and pay for the 300,000 teachers and 52,000 first responders, which our communities so desperately need. That's not to mention jobs from investing in clean energy and our national infrastructure.
