Tag Archives: fiscal cliff

A Little-Noted Lesson from the Fiscal Cliff

Apparently, the country will be taking a leap off the so-called fiscal cliff, since–despite a flurry of last-minute activity and a vote by the Senate–midnight came and went without passing anything. (And even the Senate’s measure didn’t remotely resemble a “grand bargain.”)

For most of us, the tax consequences are likely to be short-term. Incredibly, a significant number of Representatives refused to vote in 2012 to terminate the Bush tax cuts for rich folks, but are perfectly willing to come back early in 2013 after the cuts have expired and vote to reinstate them just for the non-rich. Why is that, you might reasonably ask, when the result will be exactly the same? Because they can then tell their constituents they never voted for a tax increase. They evidently think the American public is really, really stupid–and we elected them, so maybe they’re right.

Then there’s the issue of spending cuts. If a larger deal cannot be negotiated, and the dreaded “sequester” goes into effect, we’re told that government spending will be sharply reduced. And that’s true–as far as it goes. But the nasty little secret is that government is no longer a word that describes…government. As in public sector employees and elected and appointed officials. After decades of privatization and contracting out, government is all of us and everywhere–defense contractors, civil engineers, social service agencies and other for-profits and nonprofits that depend upon government contracts to survive. The last analysis I saw–and it is now several years old–counted some eighteen million people working full-time at ostensibly private and nonprofit sector jobs that were wholly supported by our tax dollars.

Retrenchment in those government contracts–required by the sequester–will affect more than just those 18+ million people who are employed in what we might call the “quasi-government” sector. When the defense contractor loses his biggest customer, his suppliers lose theirs, and so on down the line. The economic contraction would be rapid and severe.

I say it “would be” because I believe that the reality of that outcome will quickly become apparent even to the less-than-brilliant policymakers in Congress. (Their constituents can be counted on to point it out, if they somehow don’t get it.) Call me Pollyanna, but I think we’ll see some sort of acceptable-but-not-ideal agreement early in January.

Even if we evade economic disaster via fiscal cliff-diving, however, it may be worth pondering the largely unrecognized extent to which the private and nonprofit sectors are now part and parcel of that “bloated and wasteful” government we routinely excoriate, and the extent to which demands for cuts in “government spending” threaten to reduce our own incomes. That’s certainly not an argument for unrestrained spending; it is, however, an argument for recognizing economic reality and the extent to which “privatization”–which has increased, rather than reduced, the size of government–has made necessary spending cuts infinitely more difficult.

Happy New Year.



Cliff Notes


I actually feel sorry for John Boehner. He presides over a Caucus that isn’t simply stubborn or contentious–thanks to its most ideological members, it is simply ungovernable. These members are unwilling to move an inch for the good of the country or even their own party. It’s stunning.

What I don’t get is the fanatical refusal to raise taxes even a small amount for even a few of the very richest Americans. Boehner’s “Plan B”–which crashed and burned thanks to that refusal–allowed the Bush tax cuts to expire only for those making more than a million dollars a year. Protecting those few Americans from a slight raise in the marginal rate was evidently so important to the Tea Party fanatics that they were willing to knock the props from under their own party’s leader and reinforce a growing public perception that the GOP has become far too extreme. (A recent poll found that 52% of Americans hold that view of the party–and that was before this latest embarrassment.)

Presumably, Boehner’s inability to get what he wanted from his caucus will strengthen the President’s hand as the fiscal “cliff” nears, although it’s increasingly difficult to predict anything in the Never Never Land that is Washington, D.C. The only thing that seems certain is that we’ve elected a lot of people who haven’t the faintest idea what governing is all about.

If I could explain why they are willing to go down with the ship rather than raise taxes on anyone, I’d be delighted to share that explanation in this space, but I can’t. I’m baffled.

This Is Why We Can’t Talk To Each Other Anymore….

Have we gotten to the point where we can’t have an honest political discussion any more?

I’ve used this blog to criticize the crazies (Gail Collins refers to them as ‘rabid ferrets in today’s column) who currently control the GOP. Today, I’m giving equal time to the lefties who characterize any proposed change to social programs as “cuts” to be fought tooth and nail.

As part of the “fiscal cliff” negotiations, President Obama has signaled a willingness to change the formula by which Social Security cost-of-living raises are calculated. In the wake of that suggestion, my inbox has been filled with hysterical warnings about imminent poverty for the elderly, recriminations for the administration for its willingness to “cut benefits,” and calls for Action with a capital A. Don’t bother to read the fine print. Sign this petition! Send this message!

This knee-jerk reaction is no different from that of the right-wing NRA types who equate restrictions on assault weapons with the imminent “confiscation of our guns.”

Can we stipulate that these issues are more complicated than these hysterical charges and counter-charges suggest? For once, can we have an adult conversation about the pros and cons of a suggested policy change?

A change in the formula used for calculating raises is not a cut–at least, not as that word is understood by most sentient humans. That doesn’t mean that there may not be undesirable side-effects from the proposed change, but if those undesirable side-effects exist, they should be specified and discussed.  If the proposed change will operate to harm disadvantaged populations, we should tweak the formula to avoid those consequences. Screaming that the sky will fall if XYZ occurs is rarely a prelude to rational policy debate.

The left justifiably criticizes the Tea Party ideologues for their refusal even to consider alternatives to their positions. That intransigence–that refusal to acknowledge nuance and complexity–is no more attractive or helpful when it comes from the left.