November, 28 2012, 02:07pm EDT
For Immediate Release
Contact:
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167
Galbraith: "Fiscal Cliff" a Pretext to Target Social Security, Medicare and Medicaid
WASHINGTON
JAMES K. GALBRAITH [email]
Galbraith holds the Lloyd M. Bentsen Jr. Chair in Government/Business Relations at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin. His latest book is Inequality and Instability: A Study of the World Economy Just Before the Great Crisis, (Oxford University Press, 2012.)
Galbraith recently wrote the piece "Six Reasons the Fiscal Cliff is a Scam," which states: "Stripped to essentials, the fiscal cliff is a device constructed to force a rollback of Social Security, Medicare and Medicaid, as the price of avoiding tax increases and disruptive cuts in federal civilian programs and in the military. ... Is there a looming crisis of Social Security, Medicare and Medicaid, such that these programs must be reformed? No, there is not. Social insurance programs are not businesses. They are not required to make a profit; they need not be funded from any particular stream of tax revenues over any particular time horizon. ...
"Would the military sequestration programmed to start in January be a disaster? No, it would not be. Military spending is set in any event to decline - and it should decline as we adjust our military programs to our national security needs. The sequester is at worst harmless; at best it's an invitation to speed the process of moving away from a Cold War force structure to one suited to the modern world. ...
"Would the upper-end tax increases programmed to take effect in January be a disaster? No, they would not be. There is no evidence that the low tax rates on the wealthy encourage them to spend or invest, no evidence that higher tax rates would deter the spending and investment that they might otherwise do. ...
"Would the middle-class tax increases, end of unemployment insurance and the abrupt end of the payroll tax holiday programmed for the end of January risk cutting into the main lines of consumer spending, business profits and economic growth? Yes, over time it would. But the effects in the first few weeks will be minimal, and Congress could act on these matters separately, with a clean bill either before the end of the year or early in the new one."
Galbraith also wrote the book The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too, and a new preface to The Great Crash, 1929, by John Kenneth Galbraith.
A nationwide consortium, the Institute for Public Accuracy (IPA) represents an unprecedented effort to bring other voices to the mass-media table often dominated by a few major think tanks. IPA works to broaden public discourse in mainstream media, while building communication with alternative media outlets and grassroots activists.
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