October 12, 2012: The fiscal cliff

Ray Suarez

With the presidential election less than four weeks away, all eyes are on President Obama and former Governor Mitt Romney as they frantically campaign across the county. But regardless of who wins on November 6, another political deadline is fast approaching — one that could have dramatic consequences on our nation’s economic security and future.

This deadline is known as the “fiscal cliff” — the confluence of expiring tax cuts and automatic spending cuts that will go into affect should Congress not act before January 1. Many economists have predicted that going over this “cliff” would drive the economy into another recession, increase unemployment and potentially impact many government programs.

So how can we avoid this fiscal cliff and achieve a long-term solution for the economic problems our nation continues to face?

Read the full transcript

More about the fiscal cliff:

The fiscal cliff round table

A panel of experts discuss how to avoid taxmageddon, including economist Douglas Holtz-Eakin, a former Director of the Congressional Budget Office, former four-term Oklahoma Senator Don Nickles, former Clinton Administration official Bo Cutter and Maya Rockeymore, Chair of the National Committee to Preserve Social Security and Medicare.

Explaining taxmageddon

What is the fiscal cliff anyway? Need to Know has a primer of everything you need to know — from Simpson-Bowles to the BCA.

Watch more full episodes of Need to Know.

 

 

Comments

  • Anonymous

    Why is no one talking about reforming the 14th which is the real reason medicare and ss are exploding? More immigrant families study after study have shown use more entitlements then native born people. We also give things like old age pension to new immigrants over a certain age and under a certain income level when if they want to move here; they should be financially self sufficient.
    If you stop giving automatic citizenship like its candy at halloween; you wouldnt have an entitlement problem. Make at least one parent having to be here legally and permanently before you give citizenship to a baby.

  • kenlv

    Social Security and Medicare are supposed to be independent programs financed by theFICA tax. They should not be considered part of the general budget. The 2 plus trillion dollars that they are in surplus should not be used to decrease the general fund as has been done. They must be kept sound by balancing the FICA tax, the Medicare payment that is made monthly and the benefits but they should be independent of the rest of the budget.
    Comment 2. reduced taxes on the wealthy do not provide jobs, they merely go into foreign bank accounts. I understand that wealthy American individuals and corporations have in excess of $30 trillion in off shore accounts for the purpose of hiding income from the IRS.
    Comment 3. I see absolutely no justification in taxing capital gains and some interest at lower rate than wage earners, especially since wage earners also pay FICA.
    Comment 4. Cuts in government spending take more money out of the economyl than tax cuts put in. If the stimulus had been two or three trillion dollars we would be paying down the debt by now.

  • Clyde Barrow

    Repeal of the Twenty-Second Amendment should be done. This is a ridiculous constraint in which it is telling the American public that they cannot and should not have a voice in whom they vote for and this is wrong. When a president is in office and does a great job, he/she should be elected as many times as the public deems necessary. To put a constraint on such a vote by the people should be against the law.

  • No fool here!

    The most wealthy Americans have given themselves 600% raises throughout the last 10 years and they’ve given their middle class employee’s 10% in raises. Their increase in wealth was due to them cheating their employees out of fair wages. Any man who gets wealthy off the backs of those who have made them that way but neglected to reward them for it deserve way more than the fiscal cliff we are facing. I’m with Kenlv all the way.

  • http://www.facebook.com/raymond.tilly Raymond Tilly

    The dirty little secrete is that national spending cannot exceed the economy’s growth for an extended period of time. The nations debt has been growing in excess of 5 times the growth of nations economy! No matter how high the tax rate on the rich the economy needs to grow faster than the spending. It is illogical to think economic growth will increase with higher taxes on anyone!

  • travguy

    I can’t believe my ears when I hear what a big problem entitlement reform is. People wring their hands and act like it’s the end of the world. It’s a very simple fix. A National sales tax, one cent for now, would fund entitlements for at least ten years then we may want to increase it to 2 cents. If you didn’t tell anyone they were paying it they would never know because it’s so small. This kind of tax would not cause harm to the economy or the so called job creators. Also, it would be fair to all because the wealthy would buy more expensive items than the poor making their tax bill larger. A small life long tax to pay for great benefits later in life. The greedy will not want it because they want a free ride.

  • Gustavo Corral

    I think there is a fundamental misunderstanding of what the “fiscal cliff” is. The fiscal cliff is not the extra taxes and spending cuts we may have to suffer through next year ( that is more of a fiscal hillock ). The fiscal cliff is what we will face if we do nothing and pile on another $5T in debt, and foreigners stop lending us money ( even for a single year ) and the $16T in accumulated debt ( a lot of it revolving on short-term notes ) has its interest rate spike and the dollar devalues ( because of Bernake’s QEx program ) and inflation rises ( as a result of higher oil and other import prices ) and the entire economy spins out of control.
    Think Greece, Japan, Argentina, Weimar Republic – that sort of thing. The spending cuts & taxes are actually meant to postpone the real fiscal cliff.

  • Shawnee

    If those earning large amounts of funds – say $250,000 to 1 Million would just pay the share we, the middle class, we could go a long way towards paying off the deficit. In addition we need to stimulate the economy with jobs rebuilding our infrastructure of our country, just as our parents and grandparents did during the depression. For some reason the 1% forgot that it takes decent family wage jobs to purchase goods to stimulate the economy etc. it is my opinion that President OBama has done an excellent job, not withstanding a do-nothing house of representatives led by the obdurate, short-sighted selfish republican party. As they used to say in the bad old days….kick out the bums and get on with the work of the Country!

  • Don

    I think a National Sales Tax, phased in over a five year period, incrementally increased, and starting with something like 1.5% could get us on the right track and eventually eliminate the debt AND income tax. If you spend more, you pay more in taxes. The tax code is so screwed up that it COSTS people to file their own income taxes? What’s wrong with THIS picture?

  • Anonymous

    .,The “Fiscal Clif” is just another clever topic presented to the masses by the corporate owned media, cleverly cloaked progaganda, to distract and divide the masses who are not familiar with how our economic system is controlled and operated. In fact, President Obama signed the authority to end the dollar as the world reserve currency at the G20 meeting held in Great Britain. In order to accomplish that, inflation was also approved as the method to bring the dollar down.

    Tha Fiscal Cliff is meant to sound frightening and the consistent repetition of the term instills enough panic to promote public opinion based on that fear. Raising the debt limit gives the Federal Reserve permission to inflate to a higher level (print more fiat currency) because U.S. law requires the permission of the legislative branch of gov’t to do so. Hence the motivation to rid the all powerful Banks to rid themselves of that requirement.

    No cuts, or austerity measures will cure the problem of our deficit. Look to the EU, now ruled by a central government located in Belgium, with a cental bank controlling all banking after the theft of sovereignty from all the European nations who were coaxed into the EU by similar propaganda promising to be a “cure for all evils that befel the nations of Europe.

    All fiat currencies eventually fail due to the nature of the beast that is fiat currency. The U.S. dollar has enjoyed its longevity due to the agreement at the Brettonwoods Conference to use the dollar as payment for oil. Both Sadam Hussein and Khadafy were eliminated due to their desire to change to the Euro in Sadam’s case and then gold in Khadafi’s.

    Austerity, as demonstrated particularly in the EU currently DOES NOT WORK. The Banks gambled and lost. American taxpayers have been forced by their legislators to pay the debts of the gamblers…who currently continue to gamble at the expense of the future of this nation.

    Since Gerald Ford chose NOT to hold Nixon accountable for his crimes, the U.S. Congress and Senate has failed to hold elected government officials for their crimes. Now joined by the most agregious thieves in the banking industry, the attorney g.eneral and the justice department appear to take their “orders” from the exectuvie branch when it comes to investigation and prosecution of the criminals who are extracting the wealth of our nation. Where there is no law, chaos inevitably follows.

    The people of Iceland chose NOT to be victims, declared a moratorium on the debt incurred by their governmnt, prosecuted the criminals who petpetrated the theft and are successfully rebuilding their nation as a result. We can follow their example.

    Don’t raise the debt! Nationalize the FEDERAL RESERVE. Re-institute Glass-Stegal, declare a moratorium on the deficit and place a 1% tax on every Wall Street trade which will slow the Wall St. gambling while generating income necessary to save our sovereignty. Impeach this president for his treasoness actions eliminating constitutional law that is the supreme law of this nation. The Constitution states that no man is above the law. Why then has he declared the authority to murder with immunity anyone he chooses by drone, citizen or not? His job is to “PROTECT, PRESERVE AND DEFEND THE CONSTITUTION”. Or will he take another oath at his second inaugaral?

    We have survived and prospered as a nation of law. If that law is not restored our nation will not survive.

  • Anonymous

    The deficit cannot be paid with cuts to entitlement programs. It is just a ploy to send this nation further into the abyss. Fiat currencies historically reach the level where they cannot be repaid because they are self-perpetuating debt based on fractional reserve lending.

    Increasing the debt ceiling justifies further inflation of the dollar that will end the dollar as the world reserve currency. In 2009 President Obama signed the authority to do just that at the G20 meeting held in Great Britain!

    Declare a moratorium on the debt. Re-install Glass Stegal. Place a 1% tax on all Wall St. transactions to generate income. Issue government bonds through a nationalized Federal Reserve Bank, backed by currency issued by the gov’t thru the Fed Bank to finance massive infrastructure repairs in this country. Back that currency by income from U.S. taxpayers that is not subjected to fractional reserve lending which will put the nation back to work supplying income and promoting small businesses.

    ANY FORM OF AUSTERITY MEASURES DOES NOT WORK. Look to the results and what it has led to in the EU…or look to a future as part of the NAU, loss of U.S. Sovereignty, ruled by a facist dictator who is not held accountable to any law.