Fiscal Cliff or Austerity Bomb, Time for Obama to Show Courage
The “fiscal cliff” allegedly approaches, as if the U.S.A. spends its days and nights in a Road Runner cartoon. Tax cuts expire but automatic spending cuts kick in, and that just might resend America into recession.
But a better name for it would be the “austerity bomb,” as economist Paul Krugman has written. Americans would be blowing themselves up with a weapon of their own making. Stupidity is a weapon. How ironic it would be if sheer foolishness and the “selfishism” cult did the damage.
Why am I even writing “Americans”? It’s Republicans vs. Democrats and it’s time for the victorious Democrats to start actual governing instead of catering and pandering to the countrified primitives that the Republican party has become.
It’s time for President Barack Obama to take the stand he should have taken in his first term: no more bowing to Tea Party Republicans eager to hammer the economy into the ground to back a disgraced ideology, that taxation is bad, government is emasculating and its spending toxic.
Obama doesn’t have to listen to these anti-government neanderthals any more. They certainly never bent in his direction in his first term and they still don’t. Their reaction to their election loss has been to demonize those who voted Democrat as contemptible freeloaders, conducting the Civil War all over again with words.
If Republicans were to look beyond their own borders — something they are loath to do on principle — they’d see the economic consequences of their hard-right ideology. The EU has fallen back into a recession for the second time in four years. And in some nations, like Spain and Greece where the unemployment rate is above 25 per cent, we see terrible things on the horizon.
Greece appears to be veering toward a level of disorder that will allow a return to fascism. Spain is a bubbling cauldron, such high hopes as they had only to be dashed by Eurocrats demanding austerity. One has a vision of a kind of medical experiment having been conducted on the living European patient.
The patient is dying, but the medicine is still being sold. Nothing dents the confidence of neo-liberals, not failure, and certainly not human pain.
When economies are fragile, austerity crushes. Austerity might work in boom times but in a recessionary era, austerity is the worst possible tactic. It’s all very well for Obama to do his usual “Can’t we all just get along?” but this time, he holds almost all the cards.
In an era of 24-hour news cycles desperate to grab attention, everything in the U.S. is presented as a crisis: the Petraeus crisis, the Gen. Allen crisis, the cliff, the flat state of Texas’s no to Obamacare, the constant hysteria. But these stories are exciting mainly for their novelty, even a level of cuteness.
The American economy won’t die on Jan. 1. “Nothing very bad will happen to the economy if agreement isn’t reached until a few weeks or even a few months into 2013,” Krugman writes. “So there’s time to bargain.”
The Financial Times of London reports that the bargaining thus far is over the tax cuts the rich have been enjoying. When they end, the top tax rate should switch back to a Clinton-era 39.6 per cent but the Republicans want it at 35 per cent.
There is no reason for Obama to compromise.
He won a tough election filled with Republicans openly ridiculing the nonrich. But even Californians agreed, in this election, that their nonsensical hatred of taxes had led them to the brink of collapse. It’s time for the 1 per cent to pay their fair share, not that a 39.6 per cent rate is even close to that.
This is basic stuff.
Obama then has to deal with a small matter that wasn’t raised even once in the presidential debates: the toll that global warming is taking on an unprepared world.
Drought, extreme heat, flooding and catastrophic storms are here to stay. The purpose of government is to prepare for huge events that individuals cannot deal with. There will never be a bigger crisis than the planet we put on a hot plate.
Obama has to get this absurd austerity bomb quarrel out of the way and start with the real work.
© 2012 Toronto Star