As we appear to be headed over the so-called “fiscal cliff” tomorrow, barring a last-minute deal, I’ve got to say that I think it’s a lot of ado over very little. What the “fiscal cliff” entails, if we go over it, is largely a return to the Clinton-era tax rates for everyone, which will be inconvenient but not debilitating. I’m not looking forward to paying more in taxes, but I’m happy to cough it up if it will help balance the budget and pay our nation’s bills.
Going over the so-called cliff also results in steep cuts to defense spending, and frankly, we are long overdue to become more efficient in our military spending. We’ve been making billionaires of defense contractors for far too long, buying high-priced hardware that the military itself doesn’t want and isn’t asking for. We already have more and newer military hardware than just about the rest of the world put together; unless we’re expecting to every other country in the world to get together and invade our shores, we’re spending way too much on defense.
I recognize there are other concerns, and my biggest concern is the significant scaling back of federal unemployment benefits. I would hope we could address that separately, along with targeted tax cuts for people who actually need to buy food and clothes rather than another yacht.
But has it crossed anybody’s mind that the reason this thing has turned into such a big deal is because we have overhyped it so much? I keep hearing about how it’s going to tank the economy, but I’m not convinced of that. We had these tax rates in place in the 1990s, and the economy boomed, and that was largely because we were finally behaving responsibly — we were taking in more in revenue than we were spending, which convinced investors to invest in America and its economy.
At this point, the thing I’m most worried about is that President Obama and the Democrats will agree to a bad deal rather than waiting a few more days and cutting a better deal from a position of strength. I agree entirely with the comments of Senator Tom Harkin (D-Iowa), who was quoted by the Associated Press this morning as saying the following:
“No deal is better than a bad deal. And this looks like a very bad deal the way this is shaping up,” said Harkin.
He suggested instead letting tax rates revert to the higher levels that existed when the economy was strong under President Bill Clinton, adding, “I ask, what’s so bad about that?”
I’m with Senator Harkin on this one.