If the nation goes off the fiscal cliff, it is unclear what the economic impact will be. Some think it will adversely affect the stock market, whereas others think it will slow down US growth. But, the more obvious impact will be political. The failure to resolve issues relating to the fiscal cliff are a potent example of the failure of leadership.
On Sunday December 9, former Secretary of State and Presidential Chief of State, James Baker, presented a rational way to approach the fiscal cliff. I thought to myself: why isn't he at the table, mediating between Congress and the presidential administration?
Baker presented careful, thoughtful approaches to resolving the fiscal cliff. Who is listening?
It is clear that the US needs to cut its addiction to spending and needs to raise more revenue. No matter how it is carved up, we shall all be asked to contribute in some way either through increased taxes or lower deductions.
The gamesmanship of not wanting to raise taxes is symbolic on both sides. Everyone involved knows more revenue has to gathered, and we have to reduce spending in some significant areas.
Everyone wants to appear as a fiscal conservative but has there been a true fiscal conservative in decades? Even some of the most famous supposed conservatives in fact spend liberally for their own districts or their own states.
Pledges not to raise taxes are a kind of blackmail to hold over the head of Congress. They are meaningless and should be abandoned.
A realistic approach to the fiscal cliff is necessary. Congress and the administration have only a few weeks to wake up, or we all pay more taxes without any decisions being made. That is the easy path. Then Congress can blame the President, and the President can blame Congress. That will be a failure of leadership and an invocation of "blame" as a substitute for rational decision-making.
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