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Episode #29

Will Obama and Congress Avoid the Fiscal Cliff?

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Friday, November 09, 2012

US President Barack Obama arrive on stage after winning the 2012 US presidential election November 7, 2012 in Chicago, Illinois. Barack Obama arrives on stage in Chicago, Illinois after winning the 2012 election November 7, 2012. (Saul Loeb/AFP/Getty Images)

With President Barack Obama reelected to a second term and Congress set to reconvene after Veterans Day, all eyes in Washington are set on the January 1 fiscal cliff when billions in spending cuts and tax increases will go into effect.

Addressing reporters on Capitol Hill Wednesday, House Speaker John Boehner spoke of bipartisanship and went on to say he wants to act quickly.

"I want to work together," he said. "But I want everyone also to understand, you can’t push us around."

Despite his diplomatic attitude, the question on many people's minds is whether the same president and same divided Congress have the political will to end the gridlock that's hampered any action to avert the fiscal cliff.

This week on WNYC's Money Talking, contributors Rana Foroohar of Time magazine and Joe Nocera of the New York Times discuss if there's anything in the election results that signal a change to the no-compromise attitudes of the past. 

They also weigh in on what will happen if the country does plunge over the fiscal cliff.

Hosted by:

Jeff Greenfield

Produced by:

Daniel P. Tucker

Contributors:

Rana Foroohar and Joe Nocera

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Comments [3]

Alan MacDonald from Sanford, Maine


Obama needs to get tough and propose “Wealth Reform” as the solution to the so-called 'Fiscal Cliff':

Obama is taking entirely the wrong strategy in confronting the Grover Norquist and Frank Luntz scare term "Fiscal Cliff", which was designed to impose a "Shock Doctrine" of fear, scare tactics, chaos, and stampede the already economically shocked herd of average American people into falsely believing that in the lying words of Margaret Thatcher "There is No Alternative" (TINA) but austerity on them.

Since the 1% ruling elite Empirists are trying the scare and spook the herd, the 99% of average people, Obama should instead focus on scaring the 1% --- and the best way to scare the 1% is to have a similar short 'sound bite' term that can balance the budget, save the country, and not hurt the 99%.

Obama needs to come out with the strong, short, easy to explain, and provable alternative solution that will scare the shit out of the elite: "Wealth Reform" ---- in the same context as 'Land Reform'.

Yes, the GINI Coefficient of Wealth Inequality in the US (0.80) is the HIGEST IN THE WORLD, and just as 'Land Reform' was used in many countries to break-up and better utilize the land which was monopolized by the landed elites, the Wealth that is monopolized, horded, and unavailable for useful purposes in the massive private wealth inequality in the US needs to be freed-up and made available for constructive use.

Yes, Obama can easily and compellingly show that "Wealth Reform" is what's needed to restart our economy with constructive investments. He can say, "They, the 1%, are just sitting on trillions. It's on the sidelines. Even CNBC admits this". "We need to put that money to work in America, and I'm going to send to Congress a bipartisan bill to begin the job of "Wealth Reform" right NOW, that will save the US from this supposed 'Fiscal Cliff' ------ "That's how we will solve the so-called 'fiscal-cliff', we'll just have "Wealth Reform" starting right now".

Boy would that scare the shit out of the lazy, fat-assed, speculative, rentier-class, wealthy 1% elite in the US! "Job creators" my ass. These bastards are just sitting on trillions, have the highest level of wealth inequality in the world, and are not doing anything to constructively aid the US economy.

Obama could say, "we'll just have 'Wealth Reform', take that money and invest it in America and see how that approach works.". "I'm quite sure that most Americans would like to try that approach instead of the 'Wealth Hording" and excuses that we've heard for the past years, since 2007, from these overly rich and overly wealthy 1% elite who have not been able to suggest anything that they are willing to try to help".

Even the Corporatist Media will have to report that Obama is considering "Wealth Reform" to address the 'Fiscal Cliff' and hell, just raising the specter of "Wealth Reform" will have the wealthy begging for any other solution.

Nov. 09 2012 04:17 PM
mejimenez from manhattan

Dean Baker explains why this is bull: http://www.cepr.net/index.php/blogs/beat-the-press/do-we-have-to-threaten-big-bird-to-get-npr-to-report-the-budget-fairly

Nov. 09 2012 09:36 AM
mejimenez from manhattan

Agenda, much?

It's not a cliff, it's a slope. According to a NYT article last month, "the effects would be powerful but gradual and, in some cases, reversible." (http://www.nytimes.com/2012/10/10/us/fiscal-cliff-may-be-felt-gradually-analysts-say.html?ref=business)

Nocera glibly attributes the fall of the market on Wednesday to the results of the election and fear of the fiscal cliff, but neglects to mention dire predictions for the European economy announced that morning: http://www.mercurynews.com/business/ci_21949951/european-economic-recession-worse-than-expected-leaders-say

This is just a fear-mongering propaganda campaign run by the 1% (Pete Peterson) to get the 99% to swallow this snake-oil masquerading as medicine. The Simpson-Bowles chairmen report (the commission was not able to come to an agreement) is just the Washington Consensus coming home to roost. There were something like 10 other commissions and committees preparing plans for dealing with the supposed future deficit. Several created plans that had much more progressive ratios between spending cuts and revenue increases than did Simpson-Bowles.

In spite of what is repeated every day many times a day, Social Security is not facing any major difficulties. It will be able to fully pay out to its beneficiaries until 2038. At that point, if nothing is done, it will be able to pay out 75% of the payments due the beneficiaries. It will *not* be bankrupt. But, in any case, that shortfall would be very easy to fix. The best fix would be to raise or eliminate the "cap". (Currently, only the income up to about $120K is counted for payroll tax contributions.)

The deficits faced by Medicare and Medicaid are real, but the cause and the fix is not to be found in those programs. The USA spends 2 to 3 times as much per capita for health care as do the other industrialized countries, with outcomes that are not better and in many ways are worse. This is a problem that we face whether we pay for the care through private companies or government programs. Lowering payments to Medicare and Medicaid is just cost-shifting; the high-cost care still has to be paid for, the elderly and the poor will be stuck with the bill. Medicare and Medicaid will be the highest contributors to our long-term deficits, but if our costs matched those of European countries, the deficits would essentially go away. And, of course, Medicare has much lower paperwork processing costs than the private insurance companies and also, because of its size, has much more clout to force prices down.

Nov. 09 2012 09:25 AM

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