The Fiscal Cliff.
Nothing more needs to really be said these days when we hear those words, and earlier this week a deal was done to (supposedly) avert The Fiscal Cliff, but did they? Four days later, the consensus of independent opinions is no, but they did delay it.
The reasons are obvious-no appreciable reduction in deficit spending relative to the current debt and related interest payments, combined with no large scale changes to our current tax system, or a broad increase of income taxes to everyone actually drawing a paycheck from the private sector economy. What, exactly, they did to "avert going over" this metaphorical cliff outside of raising the debt ceiling no one is exactly sure of. One thing that only non partisan news sources are willing to talk about is the fact that everyone will see a tax increase/pay decrease effective on their first paycheck of 2013 as a result of a 2.5% increase in payroll taxes to cover parts of Obamacare.
Debt ceiling talk currently isn't getting as much "talk time" as it will by the end of the year.
Raising the "debt ceiling" lets Congress spend more money-money we don't have collectively as a nation. The Fed has also announced that it plans to pull back on quantitative easing (printing more money) by the end of fiscal 2013, but when debt ceiling talks in Congress resume again at the end of the year, QE is the only tool our Federal Government has to adjust for more lending and increasing debt loads, but QE leads to a weak dollar on the international markets and rapid fluctuations on inflationary pressures.
The point I'm trying to make clear is this: nothing was actually done to prevent the inevitable from happening-bankruptcy on the part of the US Government within a decade. Raising the debt ceiling just means they plan to borrow more money to pay for things, and there are only 2 ways for them to achieve that: higher taxes (almost double) on everyone working in the private sector, or through QE. We all know the former isn't happening unless Congress actually wants open social rebellion on its hands, but hey, maybe they do...
What (I feel) needed to be done was for Congress, as a whole, to address us a nation and admit to us all that "we've f***ed up", and the only way to fix it is for all of us to take the hit for the next 5 years, during which several major changes in how our taxes are collected, applied and budgets established; and the rules by which Congress and the Federal Reserve are allowed to manage our collective finances. The biggest hurdles in achieving both of these goals would be in repealing the 16th and 17th amendments to allow for a new tax system and the return of states fiscal rights, thereby reducing the influence, power and size of our Federal Government back to Constitutional designs, and relative to the current domestic and international climates once states rights are properly protected again through appropriate appointment of Senators-a process originally designed to guarantee that Senators understood their role within our Federal Government. A role they couldn't do 100 years ago without becoming corrupted, but one that can be done today without that fear so long as the 3rd important change to how our Federal Government operates: the prohibition of all lobbying in Washington D.C. as well as limiting how much in corporations are allowed to donate to any one candidate (I'm for not allowing corporations any rights as financial support of an elected official, but even this watered down idea, I know, is asking far too much)...
There is little question for those who pay attention, that almost nothing was done to avert the financial inevitable in America, and that whatever was done, it wasn't what was needed to be done to avoid the inevitable collapse, financially, of the American Government.
Don't be fooled by short term prognosticators who say that by the end of 2013 our economy will turn around. Not only is this very short sighted of them, but unless they have a crystal ball and have seen that Congress suddenly chops $1T out of our budget and closes all tax loopholes and reductions on non business related spending, raising all of our taxes while fundamentally creating a Flat Tax (something I don't like, but that is better than what we have now), then we've already gone over "the fiscal cliff"-the bottom is just too far down to for them, or any of us, to see-yet.
Nothing more needs to really be said these days when we hear those words, and earlier this week a deal was done to (supposedly) avert The Fiscal Cliff, but did they? Four days later, the consensus of independent opinions is no, but they did delay it.
The reasons are obvious-no appreciable reduction in deficit spending relative to the current debt and related interest payments, combined with no large scale changes to our current tax system, or a broad increase of income taxes to everyone actually drawing a paycheck from the private sector economy. What, exactly, they did to "avert going over" this metaphorical cliff outside of raising the debt ceiling no one is exactly sure of. One thing that only non partisan news sources are willing to talk about is the fact that everyone will see a tax increase/pay decrease effective on their first paycheck of 2013 as a result of a 2.5% increase in payroll taxes to cover parts of Obamacare.
Debt ceiling talk currently isn't getting as much "talk time" as it will by the end of the year.
Raising the "debt ceiling" lets Congress spend more money-money we don't have collectively as a nation. The Fed has also announced that it plans to pull back on quantitative easing (printing more money) by the end of fiscal 2013, but when debt ceiling talks in Congress resume again at the end of the year, QE is the only tool our Federal Government has to adjust for more lending and increasing debt loads, but QE leads to a weak dollar on the international markets and rapid fluctuations on inflationary pressures.
The point I'm trying to make clear is this: nothing was actually done to prevent the inevitable from happening-bankruptcy on the part of the US Government within a decade. Raising the debt ceiling just means they plan to borrow more money to pay for things, and there are only 2 ways for them to achieve that: higher taxes (almost double) on everyone working in the private sector, or through QE. We all know the former isn't happening unless Congress actually wants open social rebellion on its hands, but hey, maybe they do...
What (I feel) needed to be done was for Congress, as a whole, to address us a nation and admit to us all that "we've f***ed up", and the only way to fix it is for all of us to take the hit for the next 5 years, during which several major changes in how our taxes are collected, applied and budgets established; and the rules by which Congress and the Federal Reserve are allowed to manage our collective finances. The biggest hurdles in achieving both of these goals would be in repealing the 16th and 17th amendments to allow for a new tax system and the return of states fiscal rights, thereby reducing the influence, power and size of our Federal Government back to Constitutional designs, and relative to the current domestic and international climates once states rights are properly protected again through appropriate appointment of Senators-a process originally designed to guarantee that Senators understood their role within our Federal Government. A role they couldn't do 100 years ago without becoming corrupted, but one that can be done today without that fear so long as the 3rd important change to how our Federal Government operates: the prohibition of all lobbying in Washington D.C. as well as limiting how much in corporations are allowed to donate to any one candidate (I'm for not allowing corporations any rights as financial support of an elected official, but even this watered down idea, I know, is asking far too much)...
There is little question for those who pay attention, that almost nothing was done to avert the financial inevitable in America, and that whatever was done, it wasn't what was needed to be done to avoid the inevitable collapse, financially, of the American Government.
Don't be fooled by short term prognosticators who say that by the end of 2013 our economy will turn around. Not only is this very short sighted of them, but unless they have a crystal ball and have seen that Congress suddenly chops $1T out of our budget and closes all tax loopholes and reductions on non business related spending, raising all of our taxes while fundamentally creating a Flat Tax (something I don't like, but that is better than what we have now), then we've already gone over "the fiscal cliff"-the bottom is just too far down to for them, or any of us, to see-yet.
No comments:
Post a Comment