America’s economic outlook just grew grimmer — whether Washington avoids the fiscal cliff or not.
That’s because Republican House Speaker John Boehner agreed to bump up taxes to the tune of $1 trillion over the next decade, ensuring that any final deal with President Obama will include hikes of at least that much. And with no meaningful spending cuts likely any time soon.
Obama’s latest offer seeks $1.2 trillion.
Hello? Does anyone out there in Washington-land remember the economy?
Sure doesn’t seem that way.
Fact is, as most economists will tell you, tax hikes don’t promote growth; they slow it down.
New levies on the “rich” would hit the economy especially hard, discouraging job-creation and investment — even as unemployment and GDP growth remain woeful.
Meanwhile, even at $1 trillion, new revenue would barely rein in bloating US debt, which would swell from $16 trillion to $25 trillion in 10 years, rather than to $26 trillion. Yet the mounting IOUs will further crimp growth, put the nation in greater hock to creditors like China and impose monstrous new interest costs.
Clearly, Boehner feels boxed in: There’s enormous pressure on him to steer clear of the “fiscal cliff,” the Dec. 31 deadline after which, absent a deal, tax hikes automatically kick in for everyone, along with mindless default spending cuts.
Should that happen, he rightly fears, Republicans will get the blame — thanks to a liberal media.
Boehner says it’s vital to limit the number of folks hit by any tax hike; thus, he drew a line at those making more than $1 million, announcing a “Plan B” yesterday to do that if a deal can’t be reached in time.
But let’s be honest: It’s Obama & Co. driving this bus, insisting on tax hikes.
Two years ago, the prez admitted the damage hikes would inflict and agreed to a two-year tax freeze: “Allowing taxes to go up,” he said, “could cost our economy.”
How tragic that both sides are now ready to throw that vital logic out the window.
The economy be damned.