After the presidential election, the national news these days is totally dominated by the specter of the coming fiscal cliff.
So here is a Michigan Citizens’ Survival Guide to Navigating the cliff, understanding it, and hopefully surviving.
What the Fiscal Cliff Means to Michigan: Perhaps the biggest event of the decade will start to unfold at the end of this year, when the nation hits the so-called “fiscal cliff.”
The ticking time bomb started last year, with the Budget Control Act of 2011, and was designed to set in place a balance of terror facing both political parties. Unless something changes beforehand, the cliff, which we reach at midnight on Dec. 31, combines draconian spending cuts for both domestic and military programs with the end of the tax cuts enacted during the Bush administration.
According to a Bridge Magazine interview with Mitch Bean, the highly respected longtime head of the House Fiscal Agency, cuts to defense and non-defense spending in Michigan alone would total $807.1 million in 2013. Repeal of the Bush tax cuts and increased payroll tax rates would reduce total state disposable income by as much as $14 billion and cut state consumption tax collections as well.
Can Ordinary Citizens Do Anything? From our perspective out here in Michigan, it’s easy to think that ordinary citizens won’t be able to affect one whit all the tugging and hauling that will go on in Washington. But that’s not so.
The Campaign to Fix the Debt — a national nonpartisan coalition of business leaders, elected officials, community leaders, academics and individual citizens — recently announced a Michigan state chapter. The idea is to bring together concerned citizens of all stripes to call on lawmakers to address the ballooning national debt.
The Campaign to Fix the Debt is designed to focus citizen pressure on elected leaders to put our economy on a sustainable course by reforming the tax code and increasing revenues, while at the same time making smart spending cuts to programs that aren’t working or aren’t necessary. More than 300,000 Americans have already signed a Citizen’s Petition calling on our leaders to do the right thing.
For more information, and to sign up:www.fixthedebt.org.
How to Navigate the Fiscal Cliff: It won’t be easy, as the problem of what to do about our nation’s out of control spending, grotesque tax code and spiraling debt has been around for years. A recently published book, “The Price of Politics” by Bob Woodward, the author of “All The President’s Men,” describes in depressing detail how President Barack Obama and Speaker of the House John Boehner spent months last year trying to agree to a “grand bargain.”
I recommend it to anybody interested in our financial future. What the book makes clear is how very complicated these matters are and how complicated it will be to get to agreement, with all the snapping and snarling from both political partisans and the special interests who infest Washington.