Fiscal Cliff, Slope, or Austerity Bomb?
The “fiscal cliff” is a budget/policy debate going on right now in D.C. that is of enormous significance for lower- and middle-income Americans and a peace and justice issue. Unless Congress and the President reach a budget accord before the end of the year, all Bush tax cuts will automatically end across the board and automatic budget cuts (sequestration) take effect.
As of Friday, November 30, Congressional Republicans were still holding the line that there should be no tax increase on the wealthiest Americans. Additionally, they contend that we must not only NOT raise taxes but we must implement austerity measures by scaling back Social Security, Medicare and Medicaid. Austerity measures have not worked in the EU.
The push to raise the retirement age and the age of eligibility for Medicare is an end-run by the wealthy. The argument goes that since life expectancy has risen, so should retirement and Medicare eligibility age. The reality is that increased life expectancy is concentrated on the upper end of the economic scale, so why should janitors have to retire later because lawyers are living longer? And, relative to income, both Social Security and Medicare are much more important to less-affluent Americans, so pushing back the age at which they can become elegible would be a bigger hit to ordinary families than to the wealthy. (Source: Paul Krugman, NYTimes, Nov. 30, 2012).
The real danger to the U.S. economy is that we’ll reduce the budget deficit too much rather than not enough. More