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Tue Nov 27, 2012, 10:06 AM

The Fiscal Cliff Is a Lie [View all]

The Fiscal Cliff Is a Lie
By Michael Lind
Salon

The need for a “grand bargain” involving taxes and entitlements — in the next few years, if not immediately — has moved to the center of discussion in Washington. But it’s the wrong grand bargain — and a very bad deal for Middle America.

According to the conventional wisdom, any grand bargain should be modeled on plans like the Bowles-Simpson plan or the Rivlin-Domenici plan — financing lower tax rates on the rich by closing tax loopholes and cutting Social Security and Medicare. In the aftermath of an election in which the candidates of the rich were trounced at the polls, America’s plutocratic conservatives might be satisfied with merely maintaining existing low tax rates on the rich, while capping loopholes and cutting Social Security and Medicare.

This entire approach should be rejected. It is based on two fallacies — first, that the existing low (or lower) personal income tax rates on the rich promote growth, and second, that America can’t afford Social Security, Medicare and Medicaid in the decades to come. A number of “astroturf” propaganda groups in Washington and elsewhere will be paid tens of millions of dollars in the next few months by the conservative Republican billionaire Pete Peterson and his allies to repeat these fallacies and get Beltway pundits and journalists to parrot them. But endless repetition does not turn fallacies into facts.

America does need long-term reforms to its entitlement system and tax system — but they have nothing to do with the specious reforms peddled by Alan Simpson, Erskine Bowles, Alice Rivlin, Pete Peterson and allied CEOs. In addition to regulating excessive healthcare costs, the United States needs a middle-class welfare state that is bigger, not smaller. It’s the restricted, elitist private welfare state that needs to be cut, not the universal public social insurance system.

The rest: http://www.salon.com/2012/11/27/the_fiscal_cliff_is_a_lie/

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WilliamPitt Nov 2012 OP
Lasher Nov 2012 #1
Mnemosyne Nov 2012 #2
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