On Wednesday, Federal Reserve Chairman Ben Bernanke warned the White House and Congress that it is necessary to strike a deal to avoid the "fiscal cliff," with caution that concerns about tax hikes and spending cuts were already affecting the economy. He cited the market volatility and "business investment among its weakest levels during the recovery." Are we ready to give a little or a lot? Washington gets to decide, and they need to do it quickly.
According to a Fox News survey, a majority of the voting public agrees that spending cuts are a must. Are you listening, Washington? The White House continues to talk about taxing the rich. But what about fixing the debt problem? That can only happen in combination with spending cuts. Something has to happen, but it's unlikely to be what any one side wants, and it's sure to be more of a media circus before it is over. Most of us are ready for a compromise.
Obviously everyone to varying degrees is going to have to contribute more (some foolishly think that taxing the rich will solve it all). Even my dog gets it. It's about all dogs, not just the big ones or the little ones, the puppies or the adults, or the lame over the healthy. For him it's all about the biscuits; he messages his concerns and recognizes that he, too, will have to give a little. Tax breaks expire at the end of the year, the budget is out of control and we're more than 16 trillion biscuits in the red.
There are many blueprints; from the original and rejected Simpson-Bowles plan, to those from both parties, business groups, AARP, and others who stand to gain or lose from some of the necessary changes. Even some business executives are pushing for a deal on the fiscal cliff over solving all the tax problems now. My personal favorite of all the groups and the answers is The Campaign to Fix the Debt, chaired by Alan Simpson and Erskine Bowles and I commend The Can Kicks Back, a group of smart millennials who care about the future.
I have confidence that tax breaks will go into place before year-end. It sadly does not seem likely that major tax reform will occur in the 112th Congress, which means that it won't happen for a long time, or certainly before April 15th. Budget cuts, severe ones, need to be made now. Now that the Google Maps App has been released, maybe a few of those developers could be recruited to help map a plan to avoid the cliff ... before we go to the dogs.