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View Diary: President Obama speaks to nation about fiscal cliff saying a deal is within sight - full transcript (41 comments)

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  •  Bobswern, did you see this article by Jeffrey (0+ / 0-)

    Sachs?  What do you think.  Sachs seems to agree with you that any deal in this regions is a disaster for anyone who believes in progressive government because we will not have the tax revenues to do anything but make further massive slashing cuts to social programs.

    This is the second part of a post I did earlier on David Brooks. ...........

    Jeffrey Sachs has a far gloomier view suggesting that the only thing worse than not reaching a deal, would be reaching a deal, as any deal we could reach with Republicans will mean Republicans have fundementally won by capping the size of government at a lower level than is possible for it to be viable as a progressive force. In Going Over the Cliff Is the Only Way to Save the Government argues if we reach a deal that extends Bush tax cuts for anyone "the federal government and the long-term purpose of the Democratic Party are both likely to be ruined for years to come," but only if if fails can we go back to "using government to promote the public wellbeing."

    The main point is this. If no deal is reached, the Bush tax cuts end. We would return roughly to the tax schedule of the end of the 1990s, when the macro-economy performed reasonably well and the budget was near balance. Federal government revenues would rise by around 2.5 percent of GDP per year compared with the current tax schedule. According to the CBO, the federal tax system would collect 20-21 percent of GDP in the second half of this decade. This is a bare minimum of what's needed for effective government.

    Sachs argues that the Bush tax cuts were never even remotely affordable if we want to sustain a modern government that provide any reasonable level of social spending.

    The means is the ends in the process of becoming. - Mahatma Gandhi

    by HoundDog on Mon Dec 31, 2012 at 12:01:39 PM PST

    [ Parent ]

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