Fiscal Cliff

[G5000]

The fiscal cliff is a manufactured crisis created by the same people who are now pretending they are trying to avoid it.

This is just like when Congress writes a budget they know will push the national debt above the current ceiling, and then a few months later they argue about whether or not to raise the ceiling.

This is theater for the rubes, meaning us.

Congress has been kicking the financial can down the road, and now all their procrastinating has collected into a cumulative "fiscal cliff".


But here's the thing. All of our budget problems can be very easily solved. But the easy solutions would greatly erode each member of Congress's ability to hold onto their power, and THAT is why they won't do it. That is why they create a metric shit ton of smoke per square inch to misdirect your attention away from the simple solutions.

Simple solutions. Not easy ones, but very simple ones.

What solutions am I talking about?

1. You want "entitlement reform?" What does that mean to a politician who wants to keep his power? It means " spending cuts" are either "on the table" (Republican) or "off the table" (Democrat). This is total bullshit. We don't need "spending cuts". We need to raise the Social Security and Medicare eligibility ages, and index them either to life expectancy or a percentage of the population.

6 percent of the population was eligible for Social Security when it was enacted. Today, 13 percent of the population is eligible. That's freaking ridiculous.

We are living longer, we should be working longer. Raise the eligibility age by 5 years, for example, and that is 5 years longer everyone is paying in, and 5 years less they are taking out. There is all the savings you need right there. Hell, this move alone may balance the budget. It if doesn't, number 2 will get you the rest of the way.


2. Screw this "tax the rich more" crap. That is all theater which only exacerbates the problem. The real solution is to reform the tax code altogether. And the only true reform would be to eliminate all tax expenditures. All of them. Every last one. No more deductions, credits, loopholes, whathaveyou. These cost our federal government over a trillion dollars a year. And how much is our current deficit? Hmmmm....

Eliminating tax expenditures has many advantages, but here are two of the biggest reasons to do this:

a. No expenditures allowed means you can greatly reduce tax rates because it broadens the tax base considerably. And that means more people are brought into the Taxpayer tent, resulting in more Americans having skin in the game. It also means that if you earn $50,000 and your neighbor earns $50,000, you are both paying the IDENTICAL amount of taxes. It does not get more fair than that.

b. If a Congressman cannot attach a rider to a bill which creates a tax loophole, then donating a truckload of campaign cash to him to do so would become moot. There goes your need for campaign finance reform. And there goes your need for term limits as the competitive field for his job just became level.

Just as an aside, a consumption tax is better than a tax on production (which is what corporate and income taxes are). The more you tax something, the less of it you get. So tax consumption, not production. A Fair Tax or Flat Tax is the way to go. We can talk about that in another topic.


So now your budget is not only balanced, it is probably running a surplus.

But we need to go one step further.



3. Defense spending is "on the table" (Democrats) or "off the table" (Republicans). Well, here's the thing. The war in Iraq is over, the war in Afghanistan is winding down. There is no excuse for continuing war level spending. There is nothing more totalitarian than the idea of making an emergency measure permanent once the emergency has passed. (Which is also why we need to let the payroll tax cuts expire, by the way).




So there you have it. The solutions are easy peasy. But both sides of the aisle will do no end of flips and twists to keep your eye off the ball.

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[exploited]

Welcome back G5000!

[Gremlin]

[The Dude]

[The Dude]

[Spider]

[The Comrade]

oh god that scene is perfect

[Professor]

I'm all infavor of driving off the cliff. Relatively minor raise in taxes, which probably need to be increased anyway (lowest level in how many years?). Then, we get huge cuts in Medicare and defense spending.

Sounds like a recipe for success to me.

Yes, I am aware that it will likely cause a recession. So what? When we are booming, people say it will end the boom. When we're at the top of a cycle, people say it will cause us to slip downward. When we're in a recession already, people say it will cause it to be longer. In other words, according to "them", it's NEVER a good time.

Well, f**k that. The time is now. Let's drive this baby over the cliff with our foot mashed on the loud pedal!

[The Dude]

The fiscal cliff has no cuts in medicare benefits. It's a cut on payments and it's capped at 2%. Read my earlier post, there's almost no safety net or entitlement cuts on the table for the fiscal cliff.

but lol @ who cares if we enter a recession.

[Professor]