Thursday, November 29, 2012

OK, let's talk about the "fiscal cliff"….

Too bad this really goofy and meaningless name got attached to the tax/spend debate that's going on now…

Yeah, they're two scary words that lend themselves nicely to the sound-bite journalism that pretends to be news coverage….but it doesn't convey any clear notions of meaningful choices or consequences…

Let's just call everything a spade:

The so-called Bush tax cuts never were a good idea for America, they need to be phased out because we have to start actually paying more right now for all the government services and benefits that we all want.

The partisan haggling about where to make spending cuts obscures some basic facts:

Yes, we have to scale back future Social Security benefits and we have to increase the revenue base (payroll taxes ) for Social Security benefits because present contributions won't cover future benefits—and we have to raise the "Social Security retirement age" because people are living so much longer.

We have to continue to reform health care so that everyone buys insurance (the "individual mandate") because America isn't going to stop turning away poor people from our emergency rooms.

We have to continue to reform health care so that doctors and health care providers are paid first for keeping people healthy and then also paid to make them well when necessary.

For the rest of federal spending, the first items that should be on the block are all the special interest exemptions/credits/loopholes that benefit the politically privileged few—unfortunately, there are a lot of them.

An aside on the federal income tax.....


  1. People aren't living much longer. On average, they are living 1.3 years longer than when Social Security was established.

    Why do we have to raise retirement age? Because we don't care about people who won't live until 68-70 or who cannot perform in their jobs until that age?

    Why not raise the contribution cap?

    There are other choices.

  2. Sorry, Ganon's comment is wrong. In the U.S., average life expectancy in 1935 was about 62 years. For Americans born in 2012, average life expectancy is about 80 years.
    When Social Security was established in 1935, the official government estimate was that about half of the population would never live long enough to collect benefits!
    We need to raise the "full benefits retirement age" now.