The government’s fiscal-cliff accord provides nothing of value, and is almost beside the point, says Wall Street Journal columnist Holman Jenkins
“The fiscal cliff turned into just another trial of strength by advocates of the welfare state to prove the welfare state is not rationally reformable in advance of a funding crisis. But we already knew that.”
The legislation raises marginal tax rates on those with income of more than $400,000 and increases payroll taxes by 2 percentage points.
Entitlements aren’t cut in the agreement, but ultimately they will be, when bond investors start to shun our debt, Jenkins says. But that has less to do with Congress’ incompetent policymaking than the economy’s strength, he maintains.
“The crisis we fear, when investors no longer will finance our deficits, doesn't begin with a failure to cut entitlements or raise taxes on the rich. It begins with an unexpected, persistent failure of the economy to grow.”
Nothing will come of present proposals from President Barack Obama to raise taxes or from Republicans’ proposals to cut spending, Jenkins writes. “Arduous and bitter politics over taxing and spending will be our lot for decades to come.”
Long-term structural reform is necessary. But the president is a large part of the problem, Jenkins says. “Mr. Obama chooses not to be president of all of us, seeking an affordable, livable solution to our long-term fiscal challenges. He chooses to be president of the country's spending interests, decrying the prospect of ‘heartless’ Republican cuts.”
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