Nobody’s telling the truth about the fiscal cliff — at least, nobody in the federal government is.
The true condition of Washington’s finances is beyond repair. Any number of accountant-types on YouTube can show you in simple terms how the debt and the deficit (those are not the same thing) are out of control. There’s not enough money anywhere to eliminate the deficit and pay the debt.
All this talk about reducing spending is equivalent to a clown juggling tennis balls: it entertains, but it makes no difference. Remember when Romney said he would eliminate Big Bird? That’s about like going into a forty-acre field, plucking a blade of grass, and crowing “Now we’re making progress; this field is finally getting mowed.” They’re spending $1 trillion a year more than they’re taking in and the entire PBS costs $445 million, Roughly 1/2,000th of the overspending. (PBS is much more than just Sesame Street.)
Obama wants to increase taxes on the rich. Why? If taxes on rich people went even so high as 100% it could only fund 1/3 of the annual overspending, and it would obviously increase unemployment. Taxing the rich won’t help the problem.
As anyone knows who has managed a business or a family budget, spending has to be reduced to whatever one can afford. The problem, of course, is that politicians get elected and re-elected by offering people stuff that someone else pays for. As a rule, only such thieves can be elected, so any who display economic sanity will eventually be defeated at the polls.
The immediate responsibility falls to the Supreme Court. Most of what Congress authorizes is unconstitutional and it’s the Court’s job to declare it so. That would prevent elected thieves from running the credit card bill up another trillion. Most of the entitlement spending would thereby be phased out.
The next step would be to streamline the tax code so that businesses have the incentive to advance and the ability to predict their futures. Eliminating the minimum wage laws would address unemployment decisively. Tax revenues would stabilize and the budget could be set accordingly.
None of this will transpire, of course, so we will certainly go off a fiscal cliff. Not in January, to be sure — that’s just political theater — but eventually America will collapse financially.
Have a nice day.