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Today's Top News
The Fiscal Hoax
Don't believe the cliff hype.
The biggest story in Washington is about something that doesn't really exist: the so-called ”fiscal cliff.” This manufactured panic is all about politicians and corporate interests getting things they want — things that don't have much to do with the ”crisis” anyway. But instead of challenging this spin, big media outlets are playing along.
So what's the not-really-a-cliff anyway? It's a number of things that are set to happen all at once starting in January. On the one hand, there are budget cuts, more or less equally divided between military and domestic spending. The threat of those cuts was supposed to force Congress to reach a deal last year. It didn't.
Add in the expiration of the Bush-era tax cuts and a temporary cut in the Social Security payroll tax and it starts to really add up. That's what's causing these breathless TV reports telling you that if Congress and the White House don't act in the next few weeks, the average family's tax bill will go up an astonishing $3,500.
Astonishing, sure. And if it all happened, the country would very likely be thrown into another recession. But will it happen? That's extremely unlikely. And is it really a cliff? Absolutely not.
A cliff, literally speaking, isn't something you can fall off only a little bit. But this tax and spending problem could go right into January without much disruption for taxpayers or the economy. And there are plenty of ways to make sure that most Americans won't see a massive tax increase. Those scary numbers you're hearing rest on the assumption that no deal is reached for the entire year.
So why call it a cliff then? To make it seem like an immediate response is essential. There are powerful interests looking to use a ”crisis” to push for policy changes that have nothing to do with the current problem. So you might turn on the TV and hear the millionaire CEO of a major corporation say the cliff is really about the ”need” to cut the earned-benefit programs Social Security and Medicare.
Oh, they don't call them ”cuts” — they prefer to talk about ”reforming” our ”entitlement programs.” But they're talking about cuts that aren't a required part of what it will take to get the country's fiscal house in order. Social Security and Medicare spending isn't, in fact, what's causing the fiscal problems we're told must be solved.
And the fact that some of these CEOs are the same Wall Street wizards who played a key role in creating the housing crisis and the Great Recession, which actually did cause fiscal woes by depressing tax revenue at the local, state and federal levels, doesn't come up. We're supposed to see them as responsible stewards of the economy.
Cutting Medicare is the part of the plan these austerity-loving chief executives are happy to talk about on TV. ”The big nut is going to have to be Medicare/Medicaid,” Honeywell CEO David Cote said in a CBS-broadcast interview. ”At the end of the day, you can't avoid the topic.”
But that's not all they have in mind. Wouldn't you know it, their prescription for the country's debt problem calls for an array of tax breaks for corporations. In other words, these CEOs are aiming for tax breaks for themselves, at the expense of Social Security and Medicare. They're putting two of the country's most effective and popular social programs arbitrarily at risk, under the guise of shrinking the federal budget deficit.
If journalism is to do us any good at all, the major media must expose this selfish agenda.
While a few skeptical reports have begun to appear in The Washington Post, New York Magazine, and on CNN, just about everywhere you turn you find stories about the dreaded but dubious fiscal cliff. Don't believe the hype.