#365: We're Headed For A Fiscal Cliff. Should We Jump?

Like most central bank chiefs, Ben Bernanke tends toward understatement. But when he testified before Congress earlier this year, Bernanke went big."On January 1, 2013," he said, "there's going to be a massive fiscal cliff of large spending cuts and tax increases."One of the biggest parts of the fiscal cliff is the expiration of the tax cuts passed by President Bush and extended by President Obama. If Congress doesn't act before the end of the year, taxes will go up for most Americans.Simon Johnson, our guest on today's show, thinks that would be a good thing."Our critics say we are proposing a larde, middle-class tax increase," Johnson says. "To which the answer is, yes. We are."He argues that a tax hike is necessary to pay for Social Security and Medicare, programs which are projected to become significantly more expensive in the coming decade.Johnson teaches economics at MIT and co-wrote the new book White House Burning.