To the Editor:
In the well-publicized muddle in Washington over the “fiscal cliff,” there is one aspect of the debate that hasn’t received enough attention to my mind.
Without a resurgence of consumer spending to fuel a recovering economy, the current slow-growth/no-growth of the national economy will continue indefinitely. Prospects for an even slower recovery in Maine are enhanced, without the return of significantly increased consumer spending throughout the country.
What is needed for spending on cars, household goods and home improvement to once more buoy the economy? I would suggest two things: public confidence in a fair tax structure, as well as adequate support for the budgets of low- and moderate-income households.
Cuts in government programs like Medicaid and Social Security and tax increases for middle class Americans are guaranteed not to stimulate consumer spending. Quite the reverse – they will dry up consumer spending even further and undermine confidence in a fair tax system.
The necessary first step for a return of consumer confidence, which is vital for a growing economy, is an end to the tax cuts for the top 2 percent of American taxpayers with incomes above $250,000 per year. Repealing these tax cuts on the richest Americans and on multinational corporations will raise $1 Trillion over the next 10 years and greatly assist in reducing the federal deficit.
However, if the lowered tax rates on incomes greater than $250,000 stay in place, solving the “fiscal cliff” puzzle becomes enormously more difficult. Much better to extend the Bush-era tax cuts for the 98 percent of households with lower incomes: a critical source of consumer spending in any economic recovery.
It’s not too late for Senators Snowe and Collins to declare their support for this policy.
Steve Ward, Newcastle
