While many experts fear dire consequences if the United States dives off the fiscal cliff — $607 billion of tax increases and spending cuts that will begin Jan. 1 barring government action — former Vermont Gov. Howard Dean thinks it would be a good thing.
"No matter what people said during the election, you cannot solve this deficit problem without everybody paying more taxes, not just rich people,” he told CNBC. Both Democrats and Republicans are trying to spare the middle class from tax hikes.
While the automatic fiscal austerity would do some damage, "the economy is much stronger than it was three years ago,” the 2004 Democratic presidential candidate said.
Editor's Note: The ‘Unthinkable’ Could Happen — Wall Street Journal. Prepare for Meltdown
The Organization for Economic Co-operation and Development says that failure to avoid the fiscal cliff “could tip an already weak economy into recession.”
Meanwhile, the business sector will benefit, Dean says. "Certainty is critical for the business community. Wall Street, who's moaning and groaning about this, is going to do much better."
But most experts think solving the budget crisis creates better certainty.
“What people are concerned about is the uncertainty that the current state of the debate represents to businesses and individuals across the country,” Delaware Gov. Jack Markell said at a news conference Tuesday, Bloomberg reports. A long-term fix is needed, he says.
Editor's Note: The ‘Unthinkable’ Could Happen — Wall Street Journal. Prepare for Meltdown
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