We should go over the "fiscal cliff" to prove to the Republicans that they cannot act like terrorists and we will not always respond like frightened gerbils. More than just a game of "chicken" there is no factual argument that proves we should not allow the Bush cuts to expire. The horror of the White House in their recent press releases is that it will cost the American middle class family around $2500 next year. That is no big deal and people should realize that they do not say if they mean "average" or "median" which is significant here (http://www.philly.com/.... /20121127_Casey_sets_hearing_on_fiscal_cliff.html). The Tax Policy Center estimates about $2,000 but uses the term, "average household." http://www.taxpolicycenter.org/.... The reason for this is that they are including 2-income families and all forms of income. When one includes all forms of income and all provisions in the Bush tax cuts, the over 80% will pay less than $2,000 and that only falls on incomes above $30,000.
Lowest fifth of households (average income: $11,239): $412
Second-lowest fifth (average income: $29,204): $1,231
Middle fifth (average income: $49,842): $1,984
Second-highest fifth (average income: $80,080): $3,540
Highest fifth (average income: $178,020): $14,173
Top 1 percent (average income: about $1.3 million): $120,537
But most of this cost to those with incomes under $30,000 will come from the temporary, two percent reduction in payroll taxes that the Obama administration pushed through so that consumers could have a few more dollars to spend is also scheduled to end on December 31 of this year along with the long term unemployment benefit extension mentioned above.
Adding to this, beginning on January 1, some 26 million households will again become subject to the alternative minimum tax which is estimated to raise taxes for many (note here the word, "many" not "median") Americans by as much as $3,700 according to Forbes.
The real threat is the comes from the sudden and immediate reduction in government spending that hits on January 1—courtesy of the failure of the White House and the Congressional GOP to reach a more reasonable agreement in 2011 to resolve the debt ceiling crisis.
This is the ‘sequester’ you’ve heard so much about.
The cuts hit all areas of the federal budget, including a $55 billion reduction to the Pentagon’s budget in 2013, a reduction of payments to physicians participating in Medicare, substantial cuts to FEMA and the Dept. of Education budget along with a host of serious reductions across the wide ranging operations of the federal government. But is this really a possibility? No, January 1st you will see Congress creating any means necessary to rescind this agreement and institute a more "reasonable" spending plan. The two issues, taxation (Bush Tax Cuts) and spending the "sequestration" must be separated and the only way of doing that is going over the "cliff."
Paul Krugman in his 11/26/12 article (http://www.nytimes.com/...) bundles together the Bush Tax Cuts and the sequestration this just confuses the problem.