Reich writes: "Why is the White House trying to scare average people about the consequences of the 'fiscal cliff?'"
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
Why is the White House Playing the Fear Game?
26 November 12
hy is the White House trying to scare average people about the consequences of the "fiscal cliff?"
If the President's strategy is to hold his ground and demand from Republicans tax increases on the wealthy, presumably his strongest bargaining position would be to allow the Bush tax cuts to expire on schedule come January - causing taxes to rise automatically, especially on the wealthy.
So you'd think part of that strategy would be reassure the rest of the public that the fiscal cliff isn't so bad or so steep, and that at the start of January Democrats will introduce in Congress a middle-class tax cut whose effect is to prevent taxes from rising for most people (thereby forcing Republicans to vote for a tax cut for the middle class or hold it hostage to a tax cut for the wealthy as well).
But today (Monday) the White House's Council of Economic Advisers issued a report today warning that if Congress allows the Bush tax cuts to expire January 1and the Alternative Minimum Tax to kick in, the middle class will face sharply-rising taxes.
The result, says the Council of Economic Advisers, could slow consumer spending by 1.7 percent next year, and slow overall economic growth by 1.4 percent. The loss of $200 billion in consumer spending is just about what American families spent on all the new cars and trucks sold in the U.S. in the last year, according to the report. About $36 billion less would be spent for housing and utilities, $32 billion less for healthcare, and $26 billion less for groceries and at restaurants.
This kind of fear-mongering plays into Republican hands.
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Comments
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This time I finally admitted it has to start somewhere, and voted all Mountain(Green) Party. I advise anyone who thinks it's a single-issue environmental thing, to look at jillstein.org/i ssues
Obama doesn't have a magic wand and he's still got his finger on the pulse of the people.
Do you have any idea how much monthly utility bills alone have increased in the past three years? Here in WV it's DOUBLE- for each of gas, water, AND electricity! Even the current CPI/COLA doesn't come close. I guarantee you'd notice if you lived on $1K/month. Do the math. It's not trivial. Literally millions of Seniors would be cutting back, already cut back meals and prescription drugs, and/or freezing to death in their homes.
In fact this whole thing is more a showdown. Democrats want more tax dollars from the wealthy, defense cuts, no functional changes to "entitlements", and unemployment insurance extensions. Republicans want anything the Democrats don't want.
So the showdown is between people that have somewhat addressed America's current fiscal situation vs. people that don't want anything the other guy wants.
So, until the Republicans start talking sense; I have yet to see a Republican legislator even tip toe into raising rates. Let the President and his team call the showdown as a cliff. For Republicans, it will be a cliff when they find out the longer they wait, the bigger the cliff is for them.
The President is calling the shots, lets see how this falls out. If the Republicans win, there will be a new Progressive party in 2016, maybe even the 2014 Congressional elections.
I knew she couldn't win either time.
RSN, I will never give you a dime as long as you espouse this insanity instead of reporting on Obama's crimes, which are as great as GWB's.
OBama and the republicans are playing for the same team. Please get this everyone instead of being pitiful sheep, begging Obama and telling him you've "got his back". That is the lamest thing I have ever heard.
the republicans have driven us here, they and the super-rich who benefited now have to pay to drive us back.
We imagined things would be better, but we didn't check in the rear-view mirror to view the damage and carnage that was strewn along the way.
Hard to do it with a jackass ear as well. Let's face it, in spite of the greater-evil scare of a potential Romney administration, Obama might not have been elected without sufficient corporate money and influence. Has he ever shown any tendency (beyond rhetoric) to bite the larger hands that feed him?
We need campaign finance reform before we can raise expectations at all. Private and corporate contributors to political campaigns should go to jail like they do in Sweden and some other countries. The "Citizens United" supreme court decision merely sanctifies in law a long-standing US acceptance of corruption and bribery in electoral politics, a tradition which we must put aside before we can be a democracy (people control) rather than a plutocracy (dollars control).
Calm down. The sky will not fall. The tax breaks for the Middle Class don't have to start coming out of our paychecks right away. The Treasury can modify the tax tables to slow down the rate at which it comes out. They can even put in the full increase on the wealthy. The military cuts are not going to suddenly be vulnerable to an Iranian invasion, or is it China this week? Also, a rapid end to Afghanistan can be used to swallowa chunk of the cut back.
That leaves the unemployed as the most endangered. A Federal jobs WPA type program can implemented using the increased tax revenues, by calling the new jobs civilian jobs in the military.
Lastly, if we go over the cliff, which is really a small hill, if Pelosi can get a package through the House by getting enough Republican votes, then reconciliation will be available in the Senate!
And contrary to what Lee Black posted, this is a game of chicken. And when you control the parachute, like the Dems do, then let it fly!!
The WPA thing is not a legislative act, but can be accomplished via the Army Corps of Engineers. They already perform domestic infrastructure work, so it take only a presidential order to implement it.
In short, there are immediate remedies to the extra tax burden on Middle America that will strengthen Obama's bargaining position.
We voted for Obama because we believed he would best represent our interests in this very upcoming battle. If he fails, we know right now to look outside the Democratic Party for a 2016 candidate. But at least give him the chance to accomplish what you voted for.
Many would be surprised at the number of WPA-like programs over the years since the "real" one - like the CETA project.
You mean like Jill Stein's "Green New Deal?"
Where were you people this election, too busy watching MSNBC and Current to do your homework as voters?
According to the polls issue by issue, over 70% of America agreed most with the Green Platform.
I was afraid of this, people need to understand what is happening and then refuse to put up with this.
Our country is incapable of being honest, and has been for 30 years until the whole system is based on nothing but greed and force. People start to find out and complain, but what is there to do that is continuous?
How do we get out from under these people who think they are the rightful and righteous owners of the world because of their inheritance and military might ?
1. Medicare: Prosecute criminals who continually defraud the system of billions.
2. Social Security: instead of cutting Soc Sec require the Federal Government to repay the IOU's it's owed since the 1960's, using Soc Sec as a piggy bank. That alone should strengthen Social Security for decades to come without raising taxes on workers. (Social Security should be off the table anyway as it does not impact the budget; it's a self-sustaining program.) So, if any politician wants to cut Soc Sec and other safety net programs, that's how you know they've got something else up their nefarious sleeves.
3. Medicaid: Weed out fraud, save billions.
As for the "Fiscal Cliff", we should wait until all the politicians are gathered at the precipice then push them off en masse. That would solve a lot of the country's problems.
What politicians do is create false problems and crises in order to get away with advancing their real agendas using the strategy of cynical subterfuge.
It's up to the the American Public to see behind their deceptions and either hold them accountable or better yet, throw the bums out by any means necessary. Viva la Revolucion!
I hope the Brass PTP and start pushing their Buds.
Sacrifice,,,wow People make a sacrifice...hav e to cut your over spending?
I have not worried about that, I buy Anerican, buy local farmers, switched banks so I did things this year you all ranted about.
OB is standing his ground...your still sniveling. ME, ME, ME....I have more to worry about than spoiled brats. There are still victims from 911, Katrina, now Sandy, foreclosures, Animals...your just arain of sand compared to those who lost everything, many still waiting for help.
Your like the selfish people in Sandy who heard the warnings and didn't prepare, waited for last minute. Allowing their belongings to go under. Then expecting to be given everything back.
Then there are those who put their sleeves up and did something to get their lives going again...I do not hear them bitching about a cliff. They went over a cliff, paddled away now are rebuilding the cliff. Maybe it is time everyone went off the cliff...heck you let us get there by previous votings.
Nittens were in ...you wouldn't have seen the cliff nor given life rafts! He was shutting Agencies down.
Learn to swim, we all did
Want Change Get off your ____s.
So who constitutes the "White House's Council of Economic Advisors" prithee?
If we saw this, we might get a pretty good part of the answer.
you inspired me to research this group, and I recommend, at a minimum, looking at wikipedia's site on the subject. It's kind of horrifying, actually.
I won't try to give you a synopsis, as it's too darn long. The Council was established in 1946, okay? But one issue that gives me a lot of concern is the following:
"In its first seven years the CEA made five technical advances in policy making, including the replacement of a "cyclical model" of the economy by a "growth model."
I'm a "John McCain economist"-in other words, i don't know shit about the subject. But to me, this SOUNDS like they decided, way back when, that our economy should be based on GROWTH. "Grow", to me, is a four letter word, and is not a good basis for our economic future.
If you have a better understanding of economics (almost a certainty), perhaps you would deign to edify us poor slobs who just don't get it. I, for one, would greatly appreciate it!
I'm a fiscal twit myself needing all clarification I can get. Mr. Reich is usually to the point so that the likes of us can at least comprehend what is being discussed.
But when I see a title or point that is taken for granted as a know quantity, I have to check into it or at least demand more and better information -that's my socio-political -historical self kickin' in as a lifelong learned habit.
Thanks and ditto on growth!
"In its first seven years the CEA made five technical advances in policy making, including the replacement of a "cyclical model" of the economy by a "growth model."
this SOUNDS like they decided, way back when, that our economy should be based on GROWTH. "Grow", to me, is a four letter word, and is not a good basis for our economic future.
Thanks and ditto on growth!
It's absolutely true that capitalism is based on the Myth of infinite growth.
Add that the "Free (ie unregulated or underregulated) Market" and not only tolerance but encouragement of GAMBLING (a pure "Finance" industry,)as a basis for creating fake value - virtual capital; have replaced "Free ENTERPRISE," a VERY different thing.
In a free enterprise system, a sustainable business, paying its bills and salaries and turning a reasonable profit, is a success. In "Free Market Capitalism," it's a failure because it doesn't guarantee "GROWTH" to its Investor/Gamble rs, who at certain levels are allowed to sell off even "risk," mostly to the government they can afford to bribe to allow, and even Insure it -at no interest.
What could possibly go wrong?
Elie Yarden
Green-Rainbow Party
Listen, you take away the huge amount of fraud and corruption from American politics and what do you have? Utter boredom!
Aristophanes, in 411 BCE wrote a play called Lysistrata. That would be the real solution to our wars and waste. Barbara K please read the wikapedia on that one.
Some women need to get together and start that movement and I "betcha" we would see some real change here.
I always also recommend reading Catch-22 to people who have never read it. Milo is the greatest character to represent American greed than anyone. Yosarian, the main character could be any of us.
And...utter boredom would be perfect. Then people would not be so distracted as to not make something of their own lives
That's right MidwestTom, and just waiting to be rolled out under Obama's NDAA should we be uppity enough to demand he actually govern as he campaigned-gott a protect all those gated communities.
The election may have indeed been all about a very limited choice between two evils.
Day after the election, the Washington-Corp orate Media Machines cranked into full operation and the term 'Fiscal Cliff' rang forth machine-gun-sta ccato fashion from every media corner and hasn't let up since.
Do you see a Stock Market trembling over Obama's presence in the Politics of the 'Fiscal Cliff'..?
No...
To me it means one thing.
Austerity Economics is about to crash down on all Americans like a ten ton brick packaged and labeled as 'Economic Salvation'...
No matter what your hopes.., just like what you see happening in the EuroZone, the main goal of most of today's post election Corpo-Politicia ns is the protection of the Wealth of the Super Wealthy Class before all else.
The 'Big Fiscal Battle' unfolding in Washington is actually over very very very small differences. Like a little bit of Potato Chips in an otherwise large bag of air.
Don't kid yourselves and don't kick back after the election and expect a 'Stand up Obama' or delude yourselves that Democrats suddenly have 'spine'...
We're being played..., one and all.
new Prez in 2008 ~ behind closed doors, of course. The huge corporations have been ruling this planet for a while now.
See the Nov.24th RSN article about the
"Trans-Pacific Partnership"for details.
" Why So Secretive? " is the title line.
Note the photo of protesters in Tokyo
taken over a year ago!! Our media have
been fully purchased as well. Ruination
of a perfectly gorgeous planet?Criminal .
Ira D. York
Didn't you know?
Another criterion is that the local voters should not be motivated enough to support a viable enough competitor next time to unseat the incumbent.
This is true of all political parties, and to me makes more sense in predicting their behavior than any generalizations one might want to make about what all Democrats or all Republicans should believe.
In theory, a president who cannot run for re-election has to pay back his prior campaign funders in setting policy, which explains why the rich always get favored, but Obama does not need the same emphasis on re-election funders this time. He has to worry about his "legacy". The legacy explains, for example, why the Republicans did not involve George W. Bush much in their most recent presidential campaign.
So, if Obama and the GOP take us over the financial cliff, we can predict how history will view the Obama administration as a result. Badly.
The Obama administration is smart enough to figure out all of the above. Do they actually think that history will blame the GOP? I don't think so, and believe that the Obama administration does not think so either.
Given all this, I cannot explain their current behavior. Is paying back past campaign funders more important than presidential legacy? It makes no sense.
What I see you and most others doing here is giving Obama more power than he has.
You and the other cynics may be correct. I don't know, because nothing has happened yet.
If you are correct, I will certainly be willing to change my mind. What are you going to do if you end up being wrong?
Judging from your attitude, that is a word you don't like to use in connection to your opinions. At this point in time, however, that is all they are. They may be based on facts, or based on selectively perceived facts, but they are still opinions until something happens.
If Obama proves to be the corporate shill you portray him to be, I'll join you in the streets, and the sooner the better.
Until then, I wish you and the other naysayers would quit assuming your assumptions are correct before they are proven to be correct.
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