The Fiscal Cliff

The negotiations between the President and Republicans in Congress over what has come to be called “the fiscal cliff” appear to be more about political posturing, political ideology, and the effort to hold political power than about preventing a deeper recession in the country.

The president wants more spending, more debt, more stimulus, higher taxes, and permanent removal of the debt ceiling limit. The republicans are willing to concede most of these things if the tax increase can be disguised as “closing deduction loopholes.”

These actions are all counterproductive and will result in the very things they intend to prevent. Increased taxes, whether by the President’s method of increases on the top 2 or 3 percent who pay taxes, or by the Republicans’ stealth method of closing deduction loopholes such as the mortgage interest deduction, will have a detrimental effect on the economy. Increased taxes will cost jobs, slow growth, and lower GDP. Slower growth and lower GDP mean fewer people working and paying taxes and that means bigger deficits and higher debt.

Neither the President nor the Republicans seem willing to address the real problem which is huge deficits year after year leading to higher and higher debt. The deficit will not be closed or lowered by increasing stimulus spending while raising taxes in an effort to cover the cost. In the long run that tactic will have the opposite of the desired effect.

What then is the Constitution Party’s response? The answer is set out quite clearly in our 2012 Platform. The plank entitled “Taxes” expresses strong opposition to the income tax, therefore the Constitution Party is opposed to any tax increase. The plank entitled “Cost of Big Government” expresses strong opposition to debt and spending above revenue, therefore the Constitution Party is opposed to deficit spending and the continued accumulation of debt.

In summary, the Bush tax cuts should be extended with no new stimulus spending allowed. Taxes should actually be lowered while at the same time reducing spending across the board. Jobs could come home to America which would help lift people out of poverty and return them to the middle class. The tax base would then increase thus helping to close the deficit. This could be started by changing the corporate tax structure to favor domestically located companies. Staying on shore would save companies taxes and the cost of shipping to the American market.

Finally, hundreds of billions of dollars per year, at least, could be saved by stopping all unnecessary wars and unnecessary foreign military involvement. This should be done in conjunction with lower taxes and reduced across the board spending. Come home, mind your own business, and rebuild America and the American economy, that’s the Constitution Party way.

Darrell L. Castle