With only 32 days until tax rates automatically soar and spending cuts kick in, President Obama has released his proposal for dodging the fiscal cliff, which includes $1.6 billion in tax hikes. Ken Rogoff, professor of economics and public policy at Harvard University, joins “Starting Point” on Friday to argue that a mix of spending cuts and higher taxes are necessary, but that Congress needs to consider the long term costs of entitlement programs for any long-lasting solution to the debt crisis.
“Entitlement is the big, looming problem,” the Harvard professor argues. “It is a long-term problem every year. It's likely to get worse as we age. Medical care costs go up. That's the big problem.” He adds that “until people feel it’s fair, and they’re nowhere near feeling it’s fair, [the cuts] are not going to happen.”
Rogoff also says that while he believes the wealthy will need to pay higher taxes, the middle class will also “need” to pay more unless there’s “organic growth that just makes us boom for 20 years.” “We don’t have that,” he says.