The "Fiscal Cliff" would drag America into certain recession

Congress must overcome its partisan rifts.

Irrespective of next week’s election, the fiscal challenges facing the next US government are vast. As the country races towards January’s “fiscal cliff”, the drumbeat warnings of recession have reached fever pitch, with partisan wrangling threatening to derail the sluggish US recovery.

Coming into effect at the dawn of 2013, the “fiscal cliff” represents the confluence of two events: a raft of spending cuts agreed as part of last year’s deal to raise the national debt ceiling and the expiration of Obama-backed extensions of tax breaks introduced in the Bush years.

The fiscal belt-tightening is expected to slash the deficit by almost $500bn – its steepest reduction since 1968. At 5.1 per cent, the rate is comparable to those experienced by Greece, Spain and Italy during their recent austerity drives.

Going over the cliff would almost surely plunge the US into recession, given the fragility of the economy. In May, the Congressional Budget Office warned of a 1.3 per cent contraction if action was not taken.  However, as the cliff looms, gloomier forecasts have predicted annual GDP contractions ranging from 3.6 per cent to 4 per cent.

According to a report issued by the National Association of Manufacturers (NAT), the fiscal shock would result in dramatic job losses of over 5 million by 2014, catapulting the rate of unemployment from the current rate of 7.8 per cent to 11 per cent by 2015.

Naturally, mass job losses and higher federal taxes would have severe effects on consumption. The report predicts that average disposable income is likely to fall annually by 8-10%, hitting the poorest hardest due to cuts in child tax credit and earned income tax credit.

Overall, mass unemployment, plummeting consumption and plaguing uncertainty is likely to weigh heavily on the US economy, stultifying its anaemic recovery unless drastic action is taken.

More pressingly, if Congress fails to raise the debt ceiling before the US hits its $16.4tn statutory debt limit – expected sometime between the election and the end of 2012 – the US would face default – a truly grim prospect. 

The NAT has reported that the approaching “fiscal cliff” has already shaved up to 0.6 per cent from US GDP this year alone, with the tense climate deterring businesses from investing and hiring.

As insecurity gathers momentum, an anti-debt lobby group “Campaign to Fix the Debt” has garnered the support of more than 80 CEOs – including figureheads from General Electric, Microsoft, UPS and JP Morgan – to pressure Congress into overcoming partisan deadlock to hammer out a solution.

But the prospect of this has so far looked bleak; both sides seek different solutions and both sides brook no argument over their staunch positions. One particular impasse stems from the Democrats’ drive to introduce tax cut extensions to all but the highest-earners, much to the chagrin of the Republican contingent. Likewise, Republicans want cuts to health and welfare, whilst Democrats are adverse to cuts in entitlement spending.

Just last summer, such “political brinkmanship” was cited by Standard and Poor’s in their downgrade of the US economy from AAA to AA+, as political wrangling overshadowed debate over the federal debt ceiling.

“We could have a recession in my view that is significantly greater than [anyone] is forecasting today, because it’s an indictment of our ability to govern”, said Dave Cote, leading member of Campaign to Fix the Debt.

Even the current political stalemate is conquered, extended tax cuts and deferred sequestration would hold their own economic perils. This path would only curtail the deficit by $90bn, contrary to the $500bn reduction if America does indeed “go over” the cliff.

Therein lies the trade-off: foster the recovery or confront the debt head-on. Most likely, following pleas from prominent economists such Federal Reserve chairman Ben Bernake, Congress will pursue a medium-term plan that privileges the recovery whilst tackling the debt, but time will only tell.

Overall though, inaction is most certainly not an option. The sudden jolt of the “fiscal cliff” could shock the economy into freefall, dragging the global economy down with it.

As the US stares into the abyss, Congress must – and most probably will – overcome its partisan fissures for the sake of America’s economic future.

Thus is the exigency of the times.

Clouds gather over Capitol Hill. Photo: Getty

Alex Ward is a London-based freelance journalist who has previously worked for the Times & the Press Association. Twitter: @alexward3000

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On World Aids Day, let’s end the stigma around HIV for good

Advances in treatment mean that being HIV positive is no longer a death sentence, but attitudes still lag behind.

Stigma is a dangerous human construct, principally based on unfounded prejudices. None more so than the stigma surrounding HIV. The condition has been a recognised health issue in the UK for more than 30 years, and the advances in treatment have been staggering. Unfortunately attitudes seem to have remained in the 1980s.

A recent Terrence Higgins Trust poll asked people who are living with HIV for words that they have heard to describe their health condition. “AIDS”, “riddled”, “dirty”, “disgusting”, “promiscuous”, “dirty”, “deserved”, “unclean”, “diseased” – were the most cited.

Imagine turning to someone, who lets say has a long term health condition like high blood pressure, and branding them “lazy”, “fat”, “deserving”. Or someone who has just been diagnosed with diabetes being dismissed as “greed”. Of course, I’m not saying that these health conditions are without their own stigma. Rather I doubt that Charlie Sheen would have been subjected to such a vitriolic witch hunt, had it transpired he had either of those.

Once the nausea of that coverage subsided, it was telling to note the absent voices from most of the media debate around HIV and stigma. The thing that struck most was the total lack of understanding of the condition, the treatment, and the lack of representation of those who are living with HIV.

There was little written about the stigma women living with HIV face. That which those within the black African community, or the trans community, or the over 50s – the first generation of people living into old age with HIV – are subjected to.

Such is the stigma and the shame of HIV in black African communities that it can divide families. HIV positive people can be asked to leave home, resulting in separation from their family and isolation from their community. We know of a woman from the black African community who felt so stigmatised for not breastfeeding her baby – due to her HIV treatment – that she stopped her drug regime. She died unnecessarily of an Aids-related illness. After her death, her medication was found in the attic.

While living with HIV can be stressful for all ages, ageing with HIV can introduce challenges to mental health and quality of life. When compared to their peers, older people living with HIV are disadvantaged in a wide range of ways – from poorer health, to social care and financial security. We’ve found that older people fear that social care services will be prejudiced about their HIV diagnosis. One man shared that he feared hugely going into a home – the attitudes towards HIV that he might find, and ignorance from the staff. This fear is rooted in many people’s historic and continued experience of HIV-related discrimination.  

Often considered to be a lower risk group than gay men, women are sometimes forgotten in HIV discourse and yet women are stigmatised as much as any other with HIV. Women living with the condition face a unique stigma. Some are mothers and have been accused of being “irresponsible” and “putting children at risk”.

For the record, taking antiretroviral medication (ART) lowers the amount of virus in your blood to “undetectable” levels. When the level of HIV in your blood is so low that it can’t be picked-up in tests it is undetectable. This means there is an extremely low risk of passing on HIV.

Because of ART, undetectable women have a very low risk of passing on HIV to their babies. New-borns are given their own short course of ART to further reduce their risk of developing HIV, and undergo a series of tests during the first 18 months of life.

Many transgender people are on a difficult gender journey, which includes lots of access to GPs for onward referrals to specialists, and still they worry about HIV stigma. Some deny their HIV status in settings where possible, as they look at it as a barrier to achieving their goal. Gender specialist clinics are embedded in mental health departments, and some positive trans people worry that the stigma of diagnosis might be seen as an indicator of promiscuity, which they feel might work against their cases.

And what of stigma in the gay community? The poll mentioned earlier found that of 410 gay men living with HIV, 77 per cent experience stigma – with more than two thirds experiencing this most from within the gay community.

Those gay men who take the plunge and live openly with their status are often heckled, and sent abuse on dating apps like Grindr, even receiving messages that they shouldn’t be using it because “they’ll infect others”. It’s all too easy in the digital age for stigma to persist, and ignorance to remain faceless.

Stigma is best countered with fact. But there’s a clear lack of education amongst many – both positive and negative. Growing up with sex and relationship education lessons that only teach the reproduction cycle is not enough. Young people should be given clear and detailed information about the risks of HIV, but also how living with HIV in the UK has changed, and it is now an entirely manageable health condition.

Officially, stigma is defined as a mark of disgrace associated with a particular circumstance, quality, or person. Let’s turn that around today, and use the red ribbon to stop stigma. Let’s use it a mark of solidarity, compassion and understanding.

Let’s start a conversation about how we speak and write about HIV. Let’s stand together, today of all days against HIV stigma. Start now – join the solidarity on social media by taking a selfie with your red ribbon and #StopStigma.