You may have noticed that this blog has remained very quiet on the subject of the United States’ “fiscal cliff”. That is because I, like many on the Left, am struggling to see which is the best way to secure America’s recovery whilst playing the chess game that is dealing with an Opposition-controlled lower house. It has been said by some bloggers that it might be worth just allowing the cliff to come into effect and renewing the tax cuts for the middle and lower class after 1st January, the theory being that the Republicans could not vote against it. These people say that the top rate of federal Income Tax would return to 39%, and that the budgets of just a couple of departments would fall by a few percent. Yet if the problem is that small, why are economists issuing dire warnings of the cliff plunging the economy into recession? The leadership of both political parties represented in Congress have been attempting to assemble a compromise that would cause tax rises for the very rich in exchange for concessions on spending from the Democrats. Doesn’t that sound like a fiscal tightening in any case? The only difference is that tax rates for the majority would be unchanged- which could be matched with a January bill in any case. Going over the cliff is a real possibility- if the GOP will reject a deal because it means higher tax for the richest 0.2%, it raises the question: do they care about the other 99.8%?
Politics Magazine
