Wednesday, November 28, 2012

Fiscal Cliff versus Fiscal Abyss

I would say that anyone who pays attention to politics or watches TV, should be grossly saturated with the political pundits new popular phrase "the looming fiscal cliff". The caveat to that, is that it is a gross over-estimate of the average American's ability to pay attention let alone understand what is happening, even while being slapped in the face with it.

Doubt me? I present exhibit A: Google Searches for "Who is running for president" spike on election day... in the graph, 100 does not represent hits, but rather 100% or the highest hit rate.

So yeah, over $1 Billion spent on the presidential campaigns, saturating the airwaves for months, and some of these registered voters still had no idea... scary isn't it?

Anyways, back on topic - Fiscal Cliff.

This of course, is in reference to the imminent expiration of Bush era tax cuts, 5% across the board for all taxpayers, the expiration of the 2% Social Security tax holiday, and the increase in capital gains tax rate, from 15% to 20% across the board, and some earners (over $200k/year) paying an additional 3.8% on their capital gains.

In the above article, it also describes the source of this 3.8% tax increase... from the healthcare bill, aka "Obamacare", passed in 2010:

Beginning in 2013, the national health care reform legislation that became law in March, 2010, imposes a new 3.8 percent tax on certain investment income. The new tax will apply to single filers with incomes over $200,000 and married taxpayers with incomes over $250,000.
This rhetoric being thrown around the nation's capital, is that if we do not raise taxes on the richest Americans, those who our Pretender-in-Chief claim can afford it (ie, anyone making over $200k/year) that all these wonderful tax increases expire on EVERYONE. That, and the deep deep mandatory spending cuts that are supposed to be automatic after the failure of the bi-partisan "Super" committee last year to arrive at a resolution to taxation and spending cuts.

You remember that of course, don't you? Where the Republicans refused any deal that would raise taxes and the Democrats refused to talk about spending cuts unless tax increases were on the table? And lest we forget, what resulted in the formation of the "Super" committee to begin with, where the Republicans staunchly refused to consider debt ceiling increases, and then caved in when our Messiah went public with scare tactics claiming if we did not raise the debt ceiling, that as early as the next month, people would stop receiving social security checks?

End result, Republicans caved and approved the debt ceiling increase, "Super" committee failed, automatic spending cuts are to take effect and tax increases go up automatically, and we, the American people get screwed!

And now here we are, with these Republicans having committed to a pledge 20 years ago to not raise taxes on anyone, now agreeing to go back on that agreement.

In that article, one Senator from Georgia, Saxby Chambliss is renouncing his pledge in the interest of saving his country... or so he claims.

"I care more about my country than I do about a 20-year-old pledge," said Chambliss, who faces re-election for a third Senate term in 2014.
Referring to Norquist, who has vowed to oppose candidates who break the pledge, Chambliss said that "if we do it his way, then we'll continue in debt, and I just have a disagreement with him about that."
In response to Chambliss, Norquist told CNN that the senator "wrote a commitment to the voters of Georgia."
"He got elected and re-elected making that commitment," said Norquist. "He's never promised me anything."

Essentially, as most politicians are known to do these days, he promised one thing to those who elected him, then once elected, spits on that promise and goes about business as usual, telling himself whatever lies he needs to, in order to sleep at night and live with whatever remnants of a shriveled conscience remains in his dark soul.

But broken promises aside, the more revealing detail is his belief that raising taxes on the "wealthiest" Americans, will fix our debt issue.

And don't drink the "Cool"-aid presented in this article, where it claims:
Obama's victory this month with a slightly stronger Democratic majority in the Senate and a slightly weaker Republican majority in the House signaled general public acceptance of the president's main campaign theme: raising more tax revenue from the rich as part of a deficit-reduction package.
Obama in 2008, beat McCain by a score of 69.5 million to 59.9 million, roughly 9.5 million total votes. In 2012, Obama only beat Romney by a score of 64.9 Million to 60.5 Million or roughly 4.5 Million total votes. The long and short of that, is Obama lost almost 5 million votes he had four years earlier, and his challenger, gained over half a million votes. A win is a win, but it by no means implies general acceptance of his policies, but rather the exact opposite, that his views have lost favor with a large chunk of the voting population who used to back him.

Enter my next exhibit: Wall Stree Journal Article - November 28th, 2012.
In the interest of not receiving any copyright or infringement "cease-and-decist" emails, I will not copy and paste the entire article, though it warrants it. Instead, the summary of the article, is that the $15.9 Trillion deficit tied to our fiscal cliff discussion, and the $1.2 Trillion 2012 deficit immediately tied to it this year, is actually a staggering 86.8 TRILLION DOLLARS. That is the true debt the government owes not just to other countries and other people, what they always talk about, but how much they owe in Social Security, Medicare, Medicaid, and unfunded government pensions.

This number, 86.8 TRILLION DOLLARS is over five times (5x) our entire GDP. That means, our government would have to take EVERY dollar earned by EVERY person/family making over $200k/year (ie, the "richest" Americans who can "afford it") AND EVERY SINGLE DOLLAR earned by EVERY corporation in America, JUST THIS YEAR to cover THIS YEARS true deficit of roughly 8 TRILLION DOLLARS.

Of course, after you raped every corporation and "richest" family of every penny they owned, there would truly be nothing left next year to take from either of them. This would amount to a farmer eating all their wheat one winter, then wondering how they were going to grow crops since they did not hold out any for seed the following season.

So looming "Fiscal Cliff" or already here "Fiscal Abyss"? The answer is easy, unless you are one of those voters who had to look up who was running for president the weekend before the election...

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