[edited 11/23/12 4:33 EST]
The mainstream media has been fed a steady diet of releases from interested parties (like right-leaning propaganda tanks) about the need to adopt austerity measures, often cast as needing to save the country from out-of-control spending and unprecedented deficits and debt.
At the same time, the mainstream media has generally given up investigative journalism to engage in sports-like "he said-she said" journalism: it treats most fiscal issues as a contest between left-leaning and right-leaning groups to be described by each side's post position--i.e., as a merit-based race between equally valid positions. Without the investigative wherewithall for in-depth research, there's much less information about wehther and how the facts may support one side and not the other.
We see it on climate change, where a scientific consensus is treated as just another opinion contrasted with the wishful opinions of anti-environmental corporatists. We see it on evolution, where belief-based creationism is taught in schools alongside fact-supported scientific theory, with the two sides reported in the news as though they represent equally valid educational positions.
It shouldn't be surprising, therefore, that this approach surfaces in spades when it comes to the so-called "fiscal cliff".
One is hard pressed to find articles that give credence to the position of progressives on Social Security (it is not bankrupt), Medicare (we can solve the long-term problem of financing of reasonable universal health care without cutting benefits by learning from the facts and experiences about controlling medical care costs through single-payer systems like those adopted in every other advanced nation), or even taxes. The possibility of using the end-of-year changes as a fresh-start, "sweep the house clean" foundation for immediate action early in the new term is often ignored and, if mentioned, is generally given short shrift and inadequate explanation.
It's easy, though, to find forecasts of return to recession outcomes if the sequester and end of the Bush tax cuts are allowed to take place as currently enacted.
Take, for example, the rhetoric of Mark Johnson in a KTVB.com report, A Fiscal Cliff primer (Nov. 18, 2012, updated Nov. 19).
If Congress cannot come up with an agreement on the Simpson-Bowles ratification, and then cannot come up [with] enough compromises to pass a plan of their own, and the President refuses to extend the current January 1st deadline, it's over the cliff for Uncle Sam.
And, straight into the tax increases, unemployment jump, deep federal cuts and probable recession; A rough landing for the country and a scenario neither side wants.
The article adds to the crisis drumroll by quoting political scientist David Adler.
"And all the progress that Idaho families made in getting out of the recession will have gone by the wayside if in fact America's politicians in Washington are not able to put our fiscal house in order." Id.
In a similar vein, Jonathan Weisman in the New York Times reports today that "negotiators" have agreed on the parameters for a deal in which they will agree on fixed amounts of revenue to be raised (without tax rates increasing) and fixed amounts of cuts to social programs (and other federal programs like farm subsidies). Jonathan Weisman, Seeking Ways to Raise Taxes but Leave Tax Rate as is: Negotiators Float Ideas to Appease Both Parties, New York Times (Nov. 23, 2012), at A12.
The article contains a good bit of information (or speculation, it isn't completely clear) about what "negotiators" are considering in order to "pacify" the Republicans without permitting tax rate increases. There's no specific source attribution other than to ""aides involved in the negotiations" and a "Republican aide involved in the current talks." Id. Predictably, it also includes a description of the slated legislative changes as a "crisis" when the "'fiscal cliff' would squeeze hundreds of billions of dollars out of the fragile economy next year and, many economists say, send the country back into recession". Id.
There's not a single hint that it may not really be a "cliff". That it merely cuts back INCREASES in military spending. That the sequester, with its cuts to the military, leaves the government with more options for funding NEEDED stimulus spending. That Congress has all the power it needs to undo any truly harmful components of the sequester. That Congress can instead consider targeted cuts to lower-income taxpayers to prevent a renewal downward recession trend. That Congress can instead target spending cuts (and spending) on stimulation of the economy. That Congress, in other words, has it in its power to help lower-income taxpayers pay for needed consumption and thus to create tax cuts and controlled spending cuts to benefit the lower and lower-middle income classes whose consumption is most needed to drive economic growth.
A little better is Evan Soltas, A Gentler Slope for the 'Fiscal Cliff', Bloomberg.com (Nov. 19, 2012), in which he admits the siren-call of the term to journalists.
The vivid imagery and false urgency of the [fiscal cliff] term transformed budget arcana into a national Wile E. Coyote moment. The words lent themselves to media overexposure and political opportunism. Despite efforts by Chris Hayes, Ezra Klein and Suzy Khimm to rebrand it the “fiscal curb” or “austerity crisis” -- either of which would be more consistent with reality -- Bernanke's original phrasing has held fast. Id.
Soltas at least explores the benefit of avoiding drastic austerity measures and even considering an "alternate" path of increasing the tax take beyond the "historic" measures of 18-19% of GDP. Remember, we are currently at all-time lows in the perecentage of GDP taken in federal taxes, due especially to the enormously preferential rates to the super-elite through taxation of capital gains, dividends and private equity compensation (that is, "carried interest") at less than half the top rate on ordinary compensation.
A reasonable solution might be a combination of spending cuts and revenue increases which stabilizes both at 18 or 19 percent of gross domestic product. That would be in line with their 50-year historical average. Increases or decreases beyond this level demand larger arguments about the proper size and role of government.
Alternatively, one could contend that demographic shifts -- namely, the growing elderly fraction of the population -- or rising health care costs justify greater public resources without any moral claims about government’s proper size. There is merit to this argument, but it neglects the revenue side of the historical consensus on the taxes paid to the federal government.
The relevance of any "historical consensus" on the percent of GDP that should be paid to the federal government, however, is questionable. The times are extraordinarily different, with the years of low tax intake from the Reagan tax cuts through the Bush tax cuts, coupled with the unprecedented problem of the Bush preemptive wars being fought without the historical use of wartime increases in tax cuts (especially on the rich) to pay for them.
Maybe one of the better articles is a pre-election discussion at Fidelity.com on the "Fiscal Cliffhanger", Sept. 26, 2012. Here at least there is a good graphic demonstrating just how significant the Bush-era tax cuts are in our deficit problem ($221 billion) and how little the cut to support for Medicare payments to providers is ($11 billion). Perhaps this kind of graphic can get the upper-middle class Americans to consider their fair-share obligation. (That means couples, like most professionals such as myself, who make more than $100,000 a year but less than the $250,000 or more a year that Obama has taken as his targeted income level for reintroducting pre-Bush era taxes.) Further, the article acknowledges that gridlock in the lame duck is quite possible, but goes on to note that there will likely be a resolution--with compromise on both sides--early in 2013.
Many progressives--in which group I include myself-- do think that a clean sweep start to the new session could allow Congress to act more reasonably on our long-term fiscal needs without compromising measures needed to continue moving us out of the Bush recession.
Once the Bush tax cuts are gone and the sequester starting to take effect, Congress could enact piecemeal legislation. It could pass new, better targeted tax cuts for the lower-middle and lower income distribution. Hopefully Obama, now in office and not needing to protect his electoral future, will recognize the reasonableness of allowing some tax increases to take place in four-or five- years for those couples in the $100,000 to $250,000 taxable income set.
Once the sequester is starting to roll in, Congress could move to reinstate public pension support. It could consider long-term support for Medicare through gradual adoption of a single-payer, Medicare-for-all system that meets the real needs of the future rather than using an artificially created fiscal crisis to destroy the New Deal programs. It could accept the sequester's limited spending increases for the military. It could even finally act to reduce the tax-and-spending subsidies for Big Banks (get rid of the active financing exception to Subpart F), Big Pharmacy and Big IT (legislate new international tax rules that undo the tax evasion that current "affiliated sales" of intellectual property permits while reining in the ability of MNEs to locate their profits in offshore tax havens with sophisticated tax planning like the "Dutch sandwich" techniques), and Big Oil and Big Agribusiness (outright subsidies built into well-lobbied tax and spending provisions).