Bend finanicial analyst: We should go over 'cliff'
What if lawmakers don't reach a compromise by the end of the year and the U.S. Goes over the fiscal cliff? Bend financial analyst Bill Valentine said Thursday he believes going over the cliff would hurt in the short term, but ultimately help in the long term.
However, Valentine said he believes a deal will be reached before the fiscal cliff deadline, but it won't do enough to help the $16 trillion deficit.
"This is your burden -- this is our burden," Valentine said. "The burden of the American government is the burden of the American people."
Valentine said he believes going over the cliff will make the government and citizens realize how narrowly the U.S. is hanging on.
"No matter what happens, we're on the brink of recession," Valentine said. "We might get recession without the cliff being implemented. We might get recession based on the compromise, we might not."
On Capitol Hill, he says, one side says raise taxes on a few, but cut nothing. The other says raise no taxes, cut some spending. Valentine believes they're both wrong. His answer is to raise taxes on all, and cut spending, in a major way.
Valentine said he thinks President Obama and House Speaker John Boehner will reach a compromise, but it will only be a Band-Aid on a much larger wound.
"It might be good for a very short-term spike in the markets, and people might have the false impression that we made a right step in the direction of resolving debt -- certainly we'll be told that's the case," Valentine said. "But the numbers are so big today that neither proposal of any party comes close to dealing with this issue."
By now, Valentine said he wishes lawmakers would have taken a more meaningful approach to solve the problem.
He said he understands politics and the human element, so it makes sense, but he believes America is going to run into the debt ceiling once again.
"We just have to keep in mind that the bill is coming due," Valentine said. "We will have to get our fiscal house in order at some time. And I don't say that to scare anybody, but we're not averting it by not addressing it."
Bend-La Pine school officials said if the fiscal cliff is reached, they could lose about $500,000 in special education dollars that go to their general fund. Superintendent Ron Wilkinson said it would be "devastating," and likely lead to cutting at least eight teachers.
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