No fiscal cliff?

Few things have been hyped as breathlessly lately as the "fiscal cliff."  If there is one thing that the media loves (and citizens too, for that matter), it's a crisis.  Even if, as in this case, it's an illsuory, manufactured crisis.  The volume of ink spilled over this so-called "crisis" is outdone only by the Presidential election.  The hot air expended would float a billion balloons.

The President has the upper hand in this one.

What Obama cannot do, and what we must lobby loudly for Obama to NOT do, is chip away at Social Security, Medicaid and Medicare.  There are so many other ways to save these programs that are far better than cutting them.

Social Security, for instance, could be "fixed" by raising the cap on income subject to withholding tax from the current $110,000 up to about $250,000.  That would secure Social Security for another 75 years.  I would prefer that, instead of raising that cap to $250,000, we put a special 1% tax (or even 0.1%) on all income above $1,000,000.  That would get the money from those who can most easily afford it without pain.  But I get ahead of myself.

America's Not Falling Off A Fiscal Cliff
Don't let the headlines drive you crazy. The U.S. economy isn't headed for a double-dip recession
By Mattea Kramer and Chris Hellman, TomDispatch.com


They don’t call it the “cliff” for nothing. It’s the fiscal spot where a nation’s representatives can gather and cry doom. It’s the place — if Washington is to be believed — where, with a single leap into the Abyss of Sequestration, those representatives can end it all for the rest of us.


In the wake of President Obama’s electoral victory, that cliff (if you’ll excuse a mixed metaphor or two) is about to step front and center. The only problem: the odds are no one will leap, and remarkably little of note will actually happen. But since the headlines are about to scream “crisis,” what you need to understand American politics in the coming weeks of the lame-duck Congress is a little guide to reality, some Cliff Notes for Washington.

As a start, relax. Don’t let the headlines get to you. There’s little reason for anyone to lose sleep over the much-hyped fiscal cliff. In fact, if you were choosing an image based on the coming fiscal dust-up, it probably wouldn’t be a cliff but an obstacle course – a series of federal spending cuts and tax increases all scheduled to take effect as 2013 begins. And it’s true that, if all those budget cuts and tax increases were to go into effect at the same time, an already weak recovery would probably sink into a double-dip recession.

But ignore the sound and fury. While prophecy is usually a perilous occupation, in this case it’s pretty easy to predict how lawmakers will deal with nearly every challenge on the president’s and Congress’s end-of-year obstacle course. The upshot? The U.S. economy isn’t headed over a cliff any time soon.

Read the rest here.