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Thursday, November 15, 2012

Fiscal Cliff

Back to the matter at hand: taxes and the fiscal cliff. I love Mike Flynn's write-up of the current state of affairs:
One of the left's favorite parlor games to play on Republicans is to ask them, hypothetically, if they would accept $1 in tax hikes for something like $9 or $10 in spending cuts. The game is designed to show that Republicans have some kind of unreasonable opposition to higher taxes. Republicans, however, realize it's a trick. The tax hikes are always real, while the promised spending cuts never materialize. This year, however, the slow-moving train wreck dubbed the "fiscal cliff" offers an even worse bargain. Unless a deal is struck, the "fiscal cliff" will deliver $4.75 in tax hikes for a measly $1 in spending cuts.

The "fiscal cliff" is simply the confluence of the expiration of several tax measures and mandatory spending cuts put in place during last year's negotiations on the debt ceiling. The across-the-board spending cuts, i.e. sequestration, take effect if Obama and Congress fail to identify specific spending reductions. The media uses scary words like "draconian" and "severe" to describe the cuts, but in reality they are a paltry $109 billion a year. That's just around 3% of this fiscal year's spending. Even with this cut, federal spending will still increase next year by around $16 billion.
Read more here if you like. A couple days ago I wrote about why spending cuts work and tax increases alone don't, can't, and never will reign in a deficit. Confused about the annual increase in federal budgets? That because the federal government doesn't practice zero-balance budgeting. They automatically increase budgets by as much as 10% each year, ever since the 1974 Budget Reform Act (also around the time when D.C. really took off in growth). Also tied to the continually increasing deficit, which really took off after that point. You see, the budgets grow regardless of necessity, and certainly independent of federal revenue.

Then head over to a report by Marc Faber. First he explains that the market is going to sink. A lot. Because corporate profits are going to shrink with all the taxes new and old. Then:
Faber argued that the “fiscal cliff,” a rise in taxes and automatic spending cuts, would actually involve some minor tax increases in “five years’ time” and some spending cuts “in 100 years.”

What the U.S. needed was some pain, he said, aptly demonstrated by the euro zone’s austerity measures that are attempting, with a mixed measure of success, to curb gaping budget deficits.
“There will be pain and there will be very substantial pain. The question is do we take less pain now through austerity or risk a complete collapse of society in five to 10 years’ time?” he said, adding that there was a lack of political will to tackle the U.S. budget.
Faber identified several issues curbing an economic recovery, such as the real estate market, which he said had never been so “overbuilt.” He also said there was lots more deleveraging ahead.
“In the Western world, including Japan, the problem we have is one of too much debt and that debt now will have to be somewhere, somehow repaid or it will slow down economic growth,” Faber said. “I think we lived beyond our means from 1980 to 2007, and now it’s payback period.”
I completely agree, except I'd say we're still living well beyond our means - in fact more so now than ever before. 1980 was retrenchment compared to what we've seen in the past four years - and don't forget about the 1974 Budget Reform Act which Reagan had nothing to do with, not that he got rid of it either. Obama's had four years of $1T annual deficits and the budgets proposed (which he exceedes) have been the largest in our history! Unprecendented. Unthinkable. If it were Bush, this spending would never get off the front page. But since the liberal media prefers Democrats, they'll refrain from reminding us of the hole we're in.

And for the true consequences of Obamacare and all its taxes, I think Rush Limbaugh says it best:
Folks, let me give you a number to put that in perspective. From $30 billion to $71 billion, we're talking a $40 billion increase in bureaucratic expenses to administer health care. "That’s enough money to buy private health plans for fully half of all Americans who are now uninsured because they can’t afford it."

This law has never been about health insurance. It has never been about health care. This law is trillions in expenses and deficit spending, and it's ostensibly to cover the uninsured and to lower the costs for those who are. This is one of the biggest deceits that's ever been spread. For $80 million to $100 million we can insure everybody who's uninsured, versus trillions for this.

This is not about health care. It's not about insuring the uninsured. It is about the total control of a free people under the guise of health care. Once you're in charge of people's health... I mean, everything people do affects their health and therefore you, as the government, have the power to regulate it, which is what's on tap starting January 2014.

You say, "Well, is there something that can be done?"
I think so, but I'm not in the House of Representatives.
Yup. Obamacare will be the death of us all. And the death of our country as we know it. I am tied to the healthcare community and rest assured this law is not for the doctors, either. They're getting laid off too, because of Obama's drastic Medicare cuts, meaning that hospitals have to find new ways to meet their bottom line, including cutting needed healthcare professionals.

Meanwhile, the states in our union paint a portrait of our future as a country. From Ben Shapiro:
In the aftermath of the 2012 election, the vast majority of states are either entirely blue or entirely red, their entire legislatures and governors of one party or the other. As the Wall Street Journal reports, “In 46 states, the same party now controls both chambers of the legislature, creating distinct divisions between red and blue states.” That’s the highest number in 70 years. When governors are counted as well, there are just 12 states across the country with divided government. A full 38 states are of a single party.

If this continues, we are watching the end of America as we know it.

Red states are governed very differently from blue states. Of the 22 right-to-work states, which have provided 72% of the jobs under the weak Obama recovery, only Iowa (...) and Nevada (...) are not solid red. Meanwhile, the bluest states – states like Michigan and California and Illinois – are totally bankrupt.

What we are seeing is a complete divide throughout the country on the state level. We only get to elect one president. But on a state-by-state basis, it’s clear that the American people have two very different ideas of which way they want this country to head.

If the blue states hold true to form and the red states continue to grow, it will not be long before the red states are largely subsidizing the blue states. And when that happens, look for the bond that holds the states together to fray. If California is America’s Greece, Texas will be America’s Germany. And if the European Union cannot hold, don’t be surprised to see internal pressures in the United States, too, as more and more Americans become frustrated by a distant yet intrusive federal government they feel they cannot control.
Scary to think about, but I think he's right. Already there is talk of and signatures for seccession in all 50 states, in part to distance states from the fiscal problems and taxes from the federal government, including but not limited to Obamacare.

Americans, we conservatives tried to warn you. However ridiculous the "fringe" labels given us by the threatened liberal media, you'll find we speak sense. We talked about the hard times coming down the pike. But you didn't listen and we're stuck with the most "progressive" president in history. All that means for the every-day citizens is pain with more job losses, rising healthcare costs, new taxes across the board if a deal isn't reached (and maybe even if one is reached), more recession, more deficit, more bankrupt businesses. You reap what you sow.

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