The ‘Fiscal Cliff’:
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The ‘Fiscal Cliff’:

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The ‘Fiscal Cliff’:




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Presentation on theme: "The ‘Fiscal Cliff’:"— Presentation transcript:

Slide1

The ‘Fiscal Cliff’:

A Primer for Socialists

Socialist Education Program, Fall 2012

Boston Democratic Socialists of America/Young Democratic Socialists

www.dsaboston.org

Source: Phillips, Matthew. “Fiscal Cliff Will Drive the U.S. Into Recession,” Bloomberg

BusinesWeek

, May 17, 2012,

http://www.businessweek.com/articles/2012-05-17/the-fiscal-cliff-will-drive-the-u-dot-s-dot-into-recession

Slide2

Socialist Education Program, Fall 2012

Boston Democratic Socialists of America/Young Democratic Socialists

www.dsaboston.org

ContentsWhat is the Fiscal Cliff?Why Should we Care?Debts, Deficits & CapitalismProgressive and Socialist AlternativesThe ‘Transitional Program’ for a Deficit Fight

The ‘fiscal cliff’ is embedded in larger political debates about the deficit, debt and role of government, but the net effect of the cliff can have profound effects on overall fiscal stimulation.

Sources: TOP - randysroundtable.blogspot.com, 2012; BOTTOM – American Enterprise Institute, 2012

Slide3

Socialist Education Program, Fall 2012

Boston Democratic Socialists of America/Young Democratic Socialists

www.dsaboston.org

The Fiscal Cliff Is:

Limitation of the Alternative Minimum Tax Provisions of the “Job Creation Act of 2010” and Stimulus, End of the Payroll Tax Cut Included in the Job Creation Act of 2012, Ending Expensing of Investment Property“Budget Sequestration” will End Unemployment Insurance, Drastically Reduce Payments to Doctors Under Medicare, and Reduce Discretionary Spending by $54 billion

$390 Billion in Revenue Increases

$100 Billion in Spending Cuts

Slide4

Socialist Education Program, Fall 2012

Boston Democratic Socialists of America/Young Democratic Socialists

www.dsaboston.org

The Fiscal Cliff Is:

The Result of Public Policy Republicans in the House and Senate Democrats and the White House Agreed to Budget Sequestration as an Alternative to a Deal Over the ‘Debt Ceiling’ in Summer 2011.

A Sign of the Crisis of Neoliberal Ideology The Leadership of Both Parties are Trapped by The Prevailing Neoliberal Ideology and by the Legacy of Debt and Deficits

A Significant Economic Threat The Congressional Budget Office Predicts a Recession in 2013 with Unemployment Going Above 9% and GDP Growth Below 2%

TOP: Entitlement spending has crowded out investment as a Percentage of GDP Since the mid-19702. MIDDLE: President Obama and Speaker Boehner Meet During the ‘Debt Ceiling’ Debate. BOTTOM: Republican Presidential Candidates pledge to Reject any Deal on Tax Reform that Included $1 in Tax Increases even if Matched by $10 in Spending Cuts.

Slide5

Socialist Education Program, Fall 2012

Boston Democratic Socialists of America/Young Democratic Socialists

www.dsaboston.org

Structural Characteristics

Elite FragmentationPower of Finance CapitalWeakness of Labor

Are Expressed in the ‘Fiscal Cliff’ AsPolitical GridlockDependence on Debt and Deficit Spending and Reliance on CutsAbsence of Alternatives

Producing

Stymie

Ongoing Deficits and Debt with only Limited Reduction

Continuing Fragmentation

Slide6

Socialist Education Program, Fall 2012

Boston Democratic Socialists of America/Young Democratic Socialists

www.dsaboston.org

Why Should Socialists Care?

‘Fiscal Cliff’ is Already Being Used an Excuse for Cuts

A Recession is Bad for Working Class People and Increases ‘Flexibility’ of the Labor Market Further

The ‘Fiscal Cliff’ is Indicative of Broader Ideological and Functional Crisis of Neoliberalism

Slide7

Socialist Education Program, Fall 2012

Boston Democratic Socialists of America/Young Democratic Socialists

www.dsaboston.org

Political Economy of Debt

“Asset Price Keynesianism”

(Brenner

)

Politically Empowered the Financial Sector

Mitigated Effects of Deindustrialization

Supported Disruptive Behavior in Financial Markets

Over Time, Undermines Social Change and Social Justice

Slide8

Socialist Education Program, Fall 2012

Boston Democratic Socialists of America/Young Democratic Socialists

www.dsaboston.org

Selling Out the Most Vulnerable

Payroll Tax Reduction Expiring with Bipartisan Support

New York Times

09/31/2012

Current Debt Deal would Include Significant Cuts to Medicare

Atlantic Monthly

10/2/2012

Pete Peterson ‘Grand Bargain’ Group Active on Capitol Hill

Salon.com

10/8/2012

Slide9

Socialist Education Program, Fall 2012

Boston Democratic Socialists of America/Young Democratic Socialists

www.dsaboston.org

No “Mandate” for the Protection of Social Safety Net will Emerge from the Nov. 6 Election, Even if the President is Re-elected.

Slide10

Socialist Education Program, Fall 2012

Boston Democratic Socialists of America/Young Democratic Socialists

www.dsaboston.org

Progressive Alternatives

Economic Policy Institute:

Retain Emergency Unemployment Insurance Extension, Payroll Tax Cut and Lift Mandatory Sequestration (i.e., Protect Spending)

Congressional Progressive Caucus:

Fair Budget Fix for All Bill

’ Includes Raising Taxes on High Income Earners, Unilateral Reduction in Nuclear Forces, Closing Corporate Tax Loopholes; and the

Congressional Progressive Caucus 2012 Budget for All

Democratic Socialists of America:

???

Slide11

Socialist Education Program, Fall 2012

Boston Democratic Socialists of America/Young Democratic Socialists

www.dsaboston.org

Emergency Program

Protect Social Security and Medicare from Cuts

Absent

significant

tax reforms for the rich to pay their fair share, Seniors and the most vulnerable should not be asked to accept cuts.

Protect Unemployment Insurance

UI is an important lifeline to the millions still

longterm

unemployed as a result of a global crisis of capitalism in which they played no part.

Defend Education and Training

Do not sacrifice future generations to achieve a false ‘Grand Bargain’ on deficits and debt.

Any long-term solution to the debt problem should ensure:

The maintenance of Medicaid, Medicare and Social Security as Federal Entitlements

The recognition of Lifelong Education and Training Programs as the Cornerstones of a Just and Competitive Economy

The Urgent Need to Democratize our Fiscal Policy, bring the Federal Reserve under Democratic Control and Empower People in the

Budgetary Process

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