NRD Editor’s Note: This column originally appeared at Forbes.com.
By Bill Wilson — Several mainstream media outlets are reporting that Congressional Democrats are making explicit threats. Unless Republicans cave-in to their demands to increase taxes on higher income families and small businesses, the Democrats will block all moves to address what is called the “fiscal cliff” and plunge America into a harsh double-dip recession.
The hard leftists in Congress are playing a clever game. The GOP should call their bluff.
First off, exactly what is facing the U.S. come January? First taxes — the Bush era tax rates expire for everyone on January 1. The impact on the economy is crystal clear — the U.S. would be plunged into a deep recession with more than $300 billion taken in taxes each year. Most of that huge amount going to fund the wasteful federal government will come from the middle class and small business. On top of that, the cut in the payroll tax that funds Social Security will expire, meaning those same middle class families will get hit twice.
Then, there is spending. In exchange for allowing the federal debt ceiling rise to $16 trillion in 2011, Congress agreed to automatic cuts that are set to take place on January 1. These cuts would total $1.2 trillion over ten years or $120 billion in cuts a year — $60 billion from Defense and $60 billion from general government and welfare programs. Of course, the professional Left is demanding the cuts not take place.
So, the Democrats want to blow a hole in the budget by increasing expenditures by $120 billion a year while soaking the economy of a billion dollars more in taxes. Taking money from the productive sector of the nation, and given to the unproductive sector. But it doesn’t stop there.
Get full story here from Forbes.com.
