I have been hesitant to write about the so-called fiscal cliff for many reasons. It's an over-covered topic, leaving readers in a zombie trance, even if most of the stories shed little real light. I subscribe to the Abba Eban doctrine: "When all else fails, men turn to reason." And the less elegant: Surely, they couldn't be this stupid. But it looks as if one of two things will happen: Either we're going off the cliff/curb/ramp, or President Obama will sell out the middle class safety net to get a deal.
The Bush tax cuts on the rich need to expire. In that word, "expire," we have the answer. They were sold with an expiration date, once already extended. The cuts did not perform as advertised. The Bush years, even at their best, produced the worst job creation and growth in modern American history. Inequality grew as the rich, following the rentier model, used their money to gamble in the $600 trillion derivatives market and other casinos, rather than investing in productive, job creating enterprises. Frankly, taxes elsewhere need to go up. Americans are the least-taxed among advanced nations. And we need carbon taxes and taxes on transactions, i.e. gambling by the Wall Street Boyz.
The sequester part of the cliff/curb/ramp is an artificial creation that grew out of the 2011 budget standoff, to put a gun to negotiators to reach a debt/deficit reduction deal. It could be repealed by Congress in a day. But it won't, so serious, "automatic" reductions will start on January 1. The Congressional Budget Office has warned this will cause a recession
A bit of background is in order. Clinton surpluses turned into today's high deficit mostly because of four things: 1) The Bush tax cuts; 2) Unfunded Medicare D which even prohibited forcing Big Pharma to bid for low drug prices; 3) Lost tax revenues and rising relief costs because of the Great Recession, brought on by the banksters who got away with it, and 4) Endless war. These charts from Ezra Klein lay it out. Not surprisingly, public debt has spiked, although is well below that of World War II and lower than many other nations, including supposedly disciplined Germany. Meanwhile, investors are clamoring to lend us money by purchasing Treasuries and interest rates are near historic lows.
In other words, we don't have a debt crisis. We have an unemployment, opportunity and economic growth crisis, none of which will be addressed by the Republican austerity fetish or Mr. Obama's itchy trigger finger on "reforming entitlements." We have an infrastructure crisis. We face a climate crisis. Nothing is being done.
If the presidential election was about one big issue, it was about the rich paying a little more and preserving the social safety net. And the right lost. Why is Obama negotiating, much less trying to meet these krackpots "more than halfway"? LBJ would have heads on pikes, metaphorically speaking of course. Nixon would be employing dirty tricks and Reagan the bully pulpit. W. would have a John Yoo-type figuring out how he could claim extraordinary powers to get his way. Instead, Mr. Obama is channeling his inner Gerald Ford. It's going to be a long four years if a minority that lost the election can risk the nation's future for partisan advantage.
Yes, the House holds the purse strings. But the president is the chief executive. So I say, go over the cliff, loudly blame the Republicans, and make sure the most severe austerity hits every red state and red county. Let these people who decry government while taking its "gifts," as Willard would say, see how much they are the dependent class. The executive could also use constitutional means to avoid another debt-ceiling hostage crisis.
Indeed, there is no limit now to what the president can do. This is the consequence of the Cold War, the Imperial Presidency, loss of republican virtues and finally the enormous power grab by W. and Cheney. Behind the smoke of all the fiscal cliff stories is the reality that we can no longer govern ourselves. Part of it is the quiet coup of the oligarchy. Part the takeover of the Republican Party by reactionary extremists. And part is a lack of fighting liberal Democrats. Whatever the causes, we're setting ourselves up for a Julius Caesar moment. Sooner than you think.