Fiscal cliff: Republicans on wrong track if they help Obama raise taxes on the rich
Merely letting the payroll tax reduction and other temporary provisions championed by Obama lapse on Jan. 1 and returning federal spending to pre-recession levels would erase nearly $900 billion from the deficit. The Bush tax cuts need not be touched, at least not to solve today’s deficits.
The real problems are two-fold. Republicans such as Senators Saxby Chambliss, Lamar Alexander, and Lindsey Graham, who are prepared to validate Obama’s spending spree by increasing tax revenue, would like their constituents to believe they are fiscal conservatives, when it seems they really have no stomach to curb spending the nation can’t afford.
The nation has become dependent on big deficits to sustain even modest economic growth and keep unemployment from surging above 8 percent, because the Obama administration and Congress have not adequately addressed the structural problems that caused the recession and are now holding back growth:
- Unnecessary constraints on petroleum development in the Gulf of Mexico, off the Atlantic and Pacific Coasts, and in Alaska keep the nation woefully dependent on oil imports, despite an increase in onshore petroleum production in the lower 48 states.
- The US has competitiveness problems with China and other Asian juggernauts.
- The dysfunctions on Wall Street continue to starve small- and medium-sized businesses of the credit they need to expand.