10 Things Republicans Don't Want You to Know About the "Fiscal Cliff"
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For all those reasons, Sarah Kliff of the Washington Post suggested the United States is facing not a "fiscal cliff," but " an austerity crisis." If you have any doubt on that point, just ask UK Treasury chief George Osborne, whose Tory austerity program of draconian spending cuts and tax hikes has helped drive his country back into recession.
All of which is why the fiscal cliff debate is such a misguided and counterproductive one. The biggest challenge the United States faces now is not its national debt, but slow economic expansion and lagging job growth. As David Leonhardt explained two years ago (" One Way to Trim Deficit: Cultivate Growth"), more than anything else rapid economic growth was responsible for eliminating the budget deficits of the 1990's. And looking ahead?
If the economy grew one half of a percentage point faster than forecast each year over the next two decades -- no easy feat, to be fair -- the country would have to do roughly 40 to 50 percent less deficit-cutting than it now appears...
So arguably the single best way to cut the deficit is to make sure that any deficit-cutting plan does not also cut economic growth. Ideally, it will lift growth.
As January 1 approaches, President Obama is clearly heading that message. As for the Republicans, not so much.