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We Must Avoid Austerity on Steroids

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Jean Johnson on Bill Moyers Journal

Going over the fiscal cliff is basically austerity on steroids. It means that taxes will rise suddenly for nearly everyone. It means large, blunt, abrupt cuts in government spending — and some reckless, destructive ones as well. If the situation lasts more than a few months, it will almost certainly trigger a recession in the United States, the second one in five years. It would probably unleash a global recession as well.

The bigger unknown is whether allowing the country to go over the fiscal cliff very briefly — mainly as a negotiating technique — would lead to a modest, temporary wobble in the economy, or whether it could, like the fall of Lehman Brothers, spin out of control in ways we aren’t anticipating.

But here’s my larger question: If the country can’t come to an agreement now, when will the prospects be better? The ingredients for a deal are well known, and there are multiple plans and ideas on the table. The American people are focused on this issue, and so are their leaders. The 2012 election is behind us, and there’s only so much time before politicians start focusing on the next one, with all the posturing and politicking upcoming elections bring with them. Would that be a better environment for negotiating a prudent, fair-minded agreement?

The stakes here are high, and pushing the problem down the road raises them. Suppose the calculation that the economy can withstand a brief plunge over the fiscal cliff turns out to be wrong. Then we’ll have to confront our budget problems in a recessionary economy, not a recovering one. And then, our choices will be even more painful.

So that’s my question: If not now, when?

Jean Johnson is a senior fellow and special adviser for Public Agenda. She has authored several books as well as a series of guides published by Harper Collins designed to help citizens understand complex public policy issues, all written with Public Agenda senior fellow Scott Bittle, including Where Does the Money Go? Your Guided Tour to the Federal Budget Crisis.

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  • Arianna

    And if not us, who? Call, email, tweet, write your folks in D.C. They listen to paid infomats (not misspellt) all day long. It’s time they listen to the people they are supposed to represent!

  • Anonymous

    There is one huge difference between Dec 31 and Jan 1 when it comes to negotiations. On Dec 31 the GOP gets to use Norquist as an excuse for not doing the people’s will. On Jan 1 that excuse no longer exists. On Jan 1, the GOP would need to explain to the nation why they refuse to lower taxes on the working and middle classes when they were in such a tooth and nail fight to keep taxes low for the wealthy.