Are you one of those Americans still in the dark about the fiscal cliff–or the “physical cliff,” as one wag put it? Well, you are not alone, because even the top number crunchers and prize-winning economists seem to be up a tree on whether we face a looming financial disaster or something altogether different.
For example, Nobel Prize-winner and Princeton professor Paul Krugman views the impending doom as less a fiscal cliff and more a job crisis. “Long-term unemployment remains at levels not seen since the Great Depression. As of October, 4.9 million Americans had been unemployed for more than six months, and 3.6 million had been out of work for more than a year,” he wrote in his New York Times column a week ago.
So does this mean there is no fiscal cliff for the unemployed? In other words, they don’t have to worry about losing $2,500 of their base income, because they don’t have much income to begin with. This is certainly not a moment to make sport of Krugman’s analysis, because he goes on to say, “Influential people in Washington aren’t worried about losing their jobs; by and large, they don’t even know anyone who’s unemployed. The plight of the unemployed simply doesn’t loom large in their minds–and, of course, the unemployed don’t hire lobbyists or make big campaign contributions.”
Rep. Charles Rangel isn’t an economist, but his years on the House Ways and Means Committee have given him ample opportunities to look at the nation’s economic condition. During a recent appearance on MSNBC with Martin Bashir, he offered his own figures on the fiscal cliff by arguing that House Speaker John Boehner’s math may work, “but only if you eliminate programs for the poor, elderly, children and others.”
But how does President Barack Obama view the situation, that is, beyond the private calls to Boehner at a time when transparency is desperately needed?
According to the latest reports, the president expects the GOP to agree not to extend the Bush-era tax cuts for the rich.
“I’m pretty confident that Republicans would not hold middle-class taxes hostage to try to protect tax cuts for high-income individuals,” he told Barbara Walters during an interview on ABC News. “I don’t think they’ll do that.”
Perhaps something was discussed on that phone call to give him added confidence that the Republicans will do the right thing and that the current tax rate would be extended only on incomes up to $250,000, but what about the rest of his plan?
“I’d like to see a big package,” he said. “But the most important thing we can do is make sure the middle class taxes do not go up on January 1.”
And that, my friends–in very simple terms–is what the fiscal cliff is all about.