CAMBRIDGE – With America’s elections less than six weeks away, it is time to think seriously about what will be done afterwards to deal with the nation’s fiscal mess. Regardless of who wins, addressing the problem can no longer be postponed.
Americans are rightly focused on the “fiscal cliff” looming at the start of 2013, when, under current legislation, virtually all tax rates will rise, sucking more than 3% of GDP out of households and businesses. In addition, automatic cuts in government spending on defense and non-defense programs will subtract nearly another 1% of GDP in 2013 and similar amounts in future years. The Congressional Budget Office warns that falling off the fiscal cliff would push America’s economy into a serious recession next year.