Heard on campus: “Over the cliff, through the ceiling”
Faculty experts at Penn State Harrisburg shared their opinions on the fiscal cliff and debt ceiling at an Academic Perspectives forum titled “Over the Cliff, Through the Ceiling’’ on Feb. 6.
Dr. David Buehler, assistant professor of economics, moderated the event that featured Dr. Thomas Amlie, associate professor of accounting; Dr. Nihal Bayraktar, associate professor of economics; and Dr. Beverly A. Cigler, professor of public policy and administration.
What follows are highlights from the forum speakers:
On the ripple effect that spending cuts may have on state and local government:
“What people don’t realize is that 87 percent of people who work for government work for state and local government. The 19 million state and local government jobs account for 14 percent of total U.S. employment. Local government employment is two to three times state government employment in most states.”
— Dr. Beverly A. Cigler
On the impact of tax increases:
“Raising taxes on those making more than $400,000 ( or $450,000 for married) would reduce the 2013 deficit by only 2.6 percent. An 18.2 percent reduction in the deficit would come about if we increased the tax rate on everyone making more than $100,000 by 10 percent. For example, those making between $100,000 and $200,000 pay 16.4 percent of their taxable income in federal taxes. Increasing their rate to 26.4 percent, with similar increases on everyone making more than $100,000, would decrease the deficit by 18.2 percent.”
– Dr. Thomas Amlie
On the Gross Domestic Product (GDP):
“The GDP will be negatively affected. Should government cut spending and increase taxes? Definitely, the answer is yes; no question about that. Debt accumulation is getting larger.’’
– Dr. Nihal Bayraktar
On the effect the fiscal cliff has had on state/local government and education:
“State and local governments already fell off the cliff with the recession. They were saved by the stimulus, which retained teachers and police, primarily. Education, for example, accounts for more than half of total local employment.
“With the stimulus gone and state and local governments not having the luxury of just running up debt and having to make budget decisions, they’ve run the gamut about how to do cut-back management, how to do savings, expenditure reduction, innovative revenue increases, and better management in general.’’