Thursday, November 8, 2012

The Cliff

Between on-air sessions yesterday I was watching "Morning Joe" on MSNBC (why not Fox News Channel you ask?  One thing you learn in covering sports is that the winning locker room is always a lot more fun after a game than the losing locker room.) and Mika Brzezinski gave me a much-needed chuckle.  Coming out of a commercial break she reset the discussion topic for the next segment by saying "Now that the elections are over, Americans are turning their attention to the deficit and Government spending."

Really?  After voting to send nearly all of the same people responsible for the deficits and the increased Government spending back to Washington, NOW people are going to start thinking about it?  Anyway, the topic turned to the so-called "Fiscal Cliff"--officially referred to as Sequestration under the 1985 Deficit Reduction Act (that law really made a difference, didn't it?)--and how Congress MUST reach a budget deal to avoid automatic spending cuts and tax hikes at the end of the year.

Americans tend to be slow learners.  It took the bombings of two African embassies, the USS Cole and the World Trade Center TWICE before we realized that we needed to fight Al Qaeda where it lives and operates--rather than over here.  It took the complete collapse of the housing market before we realized that giving out no-money-down, interest-only, jumbo mortgages to people who couldn't even prove they had an income to purchase overpriced properties was a bad economic model.  And it took increased job loss and reduced incomes to realize that racking up tens of thousands of dollars in personal debt may not be the best way to manage your money.

So maybe it would be a good idea to "go over" the Fiscal Cliff--if for no other reason than to make people realize just how much it would cost to actually pay for all of the Government that has been accumulating for the past few decades.  Gone would be the Bush Tax Cuts and the Obama Pay Roll Tax Cut--none of which were accompanied by equal reductions in spending (in reality, they were paired with greater increases in expenditures).  Gone too would be thousands of defense industry jobs--as some of the military budget is not exempted from sequestration.  The Oshkosh Corporation said that its already-announced layoffs were not related to sequestration--so I'm guessing there would be additional job losses there as well.  Most economists agree that there would be a huge sell off on Wall Street (not to be confused with the huge post-election sell off yesterday) and most assuredly a second recession. 

Combine that with a refusal to lift the deficit ceiling and Washington would REALLY have to come clean with the public.  How high do you think taxes would have to go to cover the 43% of the budget currently paid for by borrowing?  You think the street riots in Greece and Spain (ironically, dealing with this same exact problem) were ugly?  Just wait 'til Joe Sixpack starts paying for his REAL "fair share".

There was a reason the Fiscal Cliff was pushed past the 2012 elections--and as far away as possible from 2014 mid-term and the 2016 Presidential elections as possible.  So you conveniently "forget" about those who got us in this mess.

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