All eyes are on Washington, as we see what the White House and the Congress agree on to avert the fiscal cliff and begin to tackle our debt. While we wait for our national leaders, we can at least have some fun coming up with our own plans.
Crunch Time – The Washington Redskins kept their playoff hopes alive with a come-from-behind victory in sudden-death overtime over the Baltimore Ravens on Sunday. Policymakers in Washington also look to be headed into overtime as the fiscal cliff negations almost certainly will cause the House of Representatives to go beyond its original target adjournment date of December 14.
In recent weeks, we've heard a lot about what each side is willing to do to avoid the fiscal cliff, but not nearly enough about how lawmakers intend to put our budget back on a sustainable path in the long term. The immediate and blunt nature of deficit reduction under the fiscal cliff would have a devastating impact on the economy, but we also cannot avoid addressing our medium- and long-term debt problem.
It may be true currently that although our national debt has been growing rapidly, interest rates are low. This fact has led some leading economic commentators to believe that putting in place a plan to reduce the deficit is not a priority and can wait.
Yesterday, Taxpayers for Common Sense sent a letter to President Obama, House Speaker John Boehner (R-OH), and Senate Majority Leader Harry Reid (D-NV), presenting a plan to rappel the fiscal cliff, as they put it. They present three steps they hope the leaders follow in making a deal:
Fiscal Commission co-chair Alan Simpson appeared last night on "The Daily Show" to talk about the fiscal cliff and the national debt. And of course, the back and forth between Simpson and Stewart is pretty hilarious. He stays on for a little while for an extended interview, so watch all three parts below.
Blue Christmas? – December can be a depressing time for many. Shorter days and the stress of the holidays affect many of us. Unfortunately, the news out of Washington won’t give any cause to perk up. Following fiscal cliff developments lately has been more depressing than watching the Washington Wizards play. Little progress has been made and earlier projections that a deal could be reached before Christmas now appear sanguine. With each passing day an 11th hour deal looks to be the best case scenario for avoiding the fiscal cliff.
UPDATE: Debt numbers in table have been slightly altered since the original posting.
With now less than a month before the country would go over the fiscal cliff, proposals from both sides have been put on the table. While a final deal could look different than the presented plans, they do provide a guide to where the negotiations stand and where lawmakers may head to reach a compromise.
We've shown that there a plenty of reasons to not go over the fiscal cliff, including that it implements fiscal consolidation in an abrupt and blunt way causing a recession and puts a great deal of strain on the poor.