Tue Nov 13, 2012, 09:21 PM
grahamhgreen (15,010 posts)
Stop saying "Fiscal Cliff"!!! What the CBO says about "Budget Control"
First of all, the Democratic Party has to stop using the Republican framing words "Fiscal Cliff".
Let's call it what it's named - "Budget Control".
The fact is anyone who is really serious about deficit reduction would look at returning to the tax rates of the Greatest Generation. The Republicans are not serious, they are using this argument to destroy the social safety net.
"Under current law, the federal budget deficit will fall dra-
matically between 2012 and 2013 owing to scheduled
increases in taxes and, to a lesser extent, scheduled reduc-
tions in spending—a development that some observers
have referred to as a “fiscal cliff.”
The recent or scheduled
expirations of tax provisions, such as those that lower
income and payroll tax rates and limit the reach of the
alternative minimum tax (AMT), will boost tax revenues
considerably in 2013 compared with the sums that will
be collected in 2012. The automatic enforcement proce-
dures established in the Budget Control Act of 2011
(Public Law 112-25) will lower spending in 2013
deficit by 5.1 percent of GDP between calendar years
2012 and 2013 (with the resulting economic feedback
included, the reduction will be smaller).
Under those fiscal conditions, which will occur under
current law, growth in real (inflation-adjusted) GDP in
calendar year 2013 will be just 0.5 percent, CBO.....
What would happen if lawmakers changed fiscal policy in
late 2012 to remove or offset all of the policies that are
scheduled to reduce the federal budget deficit by 5.1 per-
cent of GDP between calendar years 2012 and 2013?
In that case, CBO estimates, the growth of real GDP in
calendar year 2013 would lie in a broad range around
4.4 percent, well above the 0.5 percent projected for
2013 under current law."
So there really is no fiscal cliff, yes the economy will suffer somewhat if we do nothing (by about 4% GDP), but we can bolster the economy by other means, such as by getting out of the costly trade agreements that have hemorrhaged jobs overseas.
You could just follow Robert Reich's solutions to reach 4 trillion of reductions in 10 years:
"First, raise taxes on the rich... – and by more than the highest marginal rate under Bill Clinton or even a 30 percent (so-called Buffett Rule) minimum rate on millionaires. Remember: America’s top earners are now wealthier than they’ve ever been, and they’re taking home a larger share of total income and wealth than top earners have received in over 80 years. Why not go back sixty years when Americans earning over $1 million in today’s dollars paid 55.2 percent of it in income taxes, after taking all deductions and credits? If they were taxed at that rate now, they’d pay at least $80 billion more annually — which would reduce the budget deficit by about $1 trillion over the next decade. That’s a quarter of the $4 trillion in deficit reduction right there."
A 2% surtax on the wealth of the richest one-half of 1 percent would bring in another $750 billion over the decade. A one-half of 1 percent tax on financial transactions would bring in an additional $250 billion.... Raise the capital gains rate to match the rate on ordinary income and cap the mortgage interest deduction at $12,000 a year, and that’s another $1 trillion over ten years. So now we’re up to $3 trillion in additional revenue.
Eliminate special tax preferences for oil and gas, price supports for big agriculture, tax breaks and research subsidies for Big Pharma, unnecessary weapons systems for military contractors, and indirect subsidies to the biggest banks on Wall Street, and we’re nearly there.
End the Bush tax cuts on incomes between $250,000 and $1 million, and — bingo — we made it: $4 trillion over 10 years."
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Replies to this discussion thread
Stop saying "Fiscal Cliff"!!! What the CBO says about "Budget Control" (Original post)
Response to grahamhgreen (Original post)
Tue Nov 13, 2012, 09:56 PM
pa28 (4,999 posts)
1. Maybe they should call it "balanced budget day".
We'll all pay a little more in tax and we'll balance the budget by 2015.
I'm concerned about the debt and the deficit and I think it's time to solve the problem by letting the Bush tax cuts expire. We'll all pay a little more and suffer a short recession and then start over with a balanced budget. I like that idea.
Unfortunately the Republicans have painted the "fiscal cliff" like some black and white Ingmar Bergman apocalypse. Balancing the budget is not an existential crisis to the American way. It's only paying another 3-5% in tax. That's all.