If $500 billion in tax hikes and spending cuts scheduled to hit in January are not averted, then the country will suffer a substantial recession, with unemployment rising above 9% and a 2.9% contraction in gross domestic product in the first half of 2013.
For decades we've heard about CEOs who garner more in a day than their average employee earns in a year. The sad fact is our current tax code encourages these runaway pay packages -- and even subsidizes the excess.
Right before the U.S. House of Representatives left for the summer to go home to campaign for your vote, they voted to extend the Bush-era tax cuts for the richest Americans millionaires and billionaires.
Without a doubt, there's a huge chasm between the current exemptions/rates and the proposals. Does a senior optimistically plan for the $5 million exemption or look to a much pricier reality with the exemption at merely $1 million?
For the U.S. economy, serious risks could come at the end of this year from two potential self-inflicted wounds: the so-called "fiscal cliff" and the debt ceiling.
This country can't afford any more Republican governments steering the ship of state on the rocks. That goes double if they refuse to discuss the past -- as if ignoring the past didn't condemn us to repeat it.
"Jump! Run for your lives! We're about to go over the fiscal cliff!" That just about sums up the message coming out of Washington these days. Is there reason to panic? Not really.
The argument for extending the tax cuts for earners with income exceeding $250,000 annually for the sake of small business survival is erroneous and misguided. The vast majority of small business owners simply don't make that much money.
Reforms such as the Employee Free Choice Act, which would restore the right of workers to join a union, will have to become law and be enforced. Workers -- not just in manufacturing but throughout the economy -- will have to have some bargaining power.
We cannot afford to extend the tax cuts for billionaires and millionaires. There are better places to put that money and more important national needs than making the rich richer and keeping tax breaks for the wealthiest two percent.
For more than a decade, deficit hawks and their allies in the media have been promoting a grand bargain whereby Republicans agree to tax hikes and Democrats agree to cut social programs like Social Security and Medicare. That, in turn, will put the deficit on a downward path and presumably restore economic growth. The trouble with this premise is that the current deficit is mainly the result of the recession itself plus the Bush tax cuts and military spending increases. It has nothing to do with Social Security; the projected increases in Medicare spending are only the result of failure to tackle deeper health care reform.
So, how does the scheduled expiration of Republican tax cuts now become an Obama tax increase?
It is outrageous to try to balance the federal budget on the backs of our youth. Our greatest resource is the ingenuity and creativity of the American people.
Gerson calls for improved educational opportunities beginning with early child development, and that's all good. But markets have two dimensions: supply and demand. We certainly need to improve the quality of the supply and do that inclusively across the population.
In pushing for the $250,000 cap, the president is both helping those who most need it and helping the economy.
This could put the tax issue off the table in the short term and give the voters a stark choice -- continue the Bush tax cuts forever under Romney or revamp them in a sensible, context-conscious manner under Obama.