Those that want to continue the policies of the last few decades of policies that tax our grandkids to pay for us living beyond our means seem to have won the day again. Not a surprise; very sad though.
In my reading stories on the wonderful success of “avoiding the fiscal cliff” seems to amount to passing the George Bush tax cuts again (except this time when in a much much worse budgetary position) and modifying the extent to which the absolute richest benefit from those cuts (so the richest don’t get quite as step cuts as they had been getting but still are getting big cuts from before the Bush tax cuts were made. And the recent trend of treating trust fund babies as the absolute most favored taxpayers was continued (though a few of the absolute richest trust fund babies will have to have some taxes withheld from their windfalls).
I haven’t read anything about them getting rid of the “hedge fund manager” tax favors. Did they? Did they even bother to change the law so retired managers don’t get the super huge tax favors too?
On the spending beyond our means issue they seem to have just decided that having the grandkids continue to fund our spending is wonderful.
If it were up to me I would have continued some of the Bush tax cuts (certainly not for those making more than $200,000 – unless we can cut spending way more than I would guess in which case I would be fine having taxes even for the richest few lowered). I would have continued treatment that reduced taxes owed on dividends and capital gains, though perhaps a bit less than they did. I would cap mortgage deductions (at say $50,000 a year or something).
I certainly would not have supported such massive Bush tax cuts without large spending cuts. If this level of spending is what we intent to do, we need to pay for it and not just bury our kids and grandkids with huge bills. Without spending cuts I would not have voted again for the Bush tax cuts, which seems to be the main extent of their “solution” (taking a bit of the tax cuts for the wealthiest off the plate but pretty much just passing Bush’s tax cut again).
I would have accepted deficits in the next few years (given the irresponsible behavior by our elected leaders for te last 15 years paying our bills for the next few years is not feasible) but the long term trend would have to be much different for me to vote to continue huge Bush tax cuts for today on the backs of our kids and grandkids. We either have to cut spending or raise taxes, likely we have to do both.
The current system is completely unsustainable. We have enormous deficits even with artificially low interest rates. The sustainability of this living beyond our means will be crushed when interest rates rise. We are setting ourselves (or our descendants) up for huge problems.
If you are young and voting for these people you either plan to live fast and die young or are willing to sacrifice your future so your parents and you can live better today at the expense of your kids and grandkids.
No action would have been better than the action they took. The consequences today would have been bad. But the consequences of what they have been doing for decades of making our descendants pay for us living beyond our means is very bad policy and has drastic consequences. It would have been better to address the core issues by reducing spending significantly (hundreds of billions a year) and raising taxes.
I don’t see how you can cut spending enough to matter without significantly cutting military spending and also social security spending and health care spending. TSA security theater should certainly be one of the cuts but it save a few billion maybe tens of billion at most (the security theater problems are more about treating citizens unjustly more than a budget issue). Health care is a special area in that the problem is not a matter of reducing budget allocations but fixing a massively broken system that wastes hundred of billions a year. But it can’t be fixed by just reducing budgets. It has to be fixed by fixing extremely bad policy that will then result in the USA saving hudred of billions a year.
One article says they finally fixed the Alternative Minimum Tax (AMT). The AMT is a good idea but implementation was faulty requiring them to adjust it every year or trap lots of people that were not meant to be. They have supposedly instituted a permanent fix, which is good.