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Is there a difference between falling off a cliff and walking down a hillside? Somebody needs to explain the difference to the Village media crows.....because they are nearing hysteria in their frenzy to scare us all over something not really scary. Seriously....there is no "fiscal cliff."....just as sure as there were no WMD's in Iraq.
What happens come January 1? The Bush-era tax cuts expire.....including income, capital gains and dividend tax rates. Obama's payroll tax rollback expires. Just as importantly, the terms of the notorious "sequester" kick in with these consequences for the military-industrial complex....
....the Congressional Budget Office projects that the Pentagon's base budget will fall to $491 billion in 2013, down from $554 billion in 2012. Thereafter, defense spending will grow with inflation. That would save roughly $500 billion over a decade.
If the Pentagon only has $491 billion in 2013 to work with instead of $554 billion.....would the military complex fall off a cliff over it? Villagers try to scare us by telling us it would leave our military a "hollow force." Does a budget of $491 billion PER YEAR sound "hollow" to you?
But even then, the $55 billion in cuts to defense spending don't happen all at once. Instead of the military complex having a little over $46 billion per month to spend starting January 1st, they'll only have $41 billion to spend every month. Not falling off a cliff.....just walking down a hill spending $5 billion less per month.
The same is true with discretionary domestic spending. Starting January 1st, the federal government will spend $5 billion less per month on non-defense related spending....a total of $55 billion over fiscal year 2013, according to the original terms of sequestration. Question: Right now, non-defense related discretionary spending is, give or take, about $270 billion per month. Do you think only spending $265 billion per month instead of $270 billion per month starting in 2013 would be like....falling off a cliff? Really?
On the tax cuts expiring.....what's the worse that could happen? Yes, consumers, working families will have less to spend beginning the first paycheck of 2013.....but not "falling off a cliff" less. If one falls off a cliff...literally....the chances of one getting themselves seriously busted up or worse is extremely high.....but having 5-7% less to spend each paycheck beginning in January, while undesirable, is not going to cause permanent damage to anyone.
Why all the "fiscal cliff" scare tactics then? If Americans are sufficiently afraid, as the thinking goes in the Village of the Damned, they won't resist as much when Very Serious People tell them their Social Security, Medicare and Medicaid benefits must be sacrificed to avoid the...cliff. And make no mistake....all this pearl clutching over some non-threatening walk down a hillside is for the very purpose of chinking away at entitlements. The longer range goal being even lower tax rates for the top 2%.
So, when you hear the ninnies from the Village.....and they're going to major on this "fiscal cliff" bullshite until Christmas.....pay little mind to their scary, scary doomsday rhetoric about falling off cliffs and whatnot. Instead, pay attention to their rhetoric about cutting entitlement programs like Social Security.....that's the gold ring for the Village millionaires. Former Obama-ite, Peter Orszag, proposed cuts to Social Security just this week...when the fact is that SS is fully funded through 2035.
Let tax rates go back up on January 1st.....and then pass new tax cuts for everyone but the top 2%, challenging House and Senate Republicans to vote against cutting taxes for 98% of Americans. Delay all of the sequester cuts at least for a year to avoid threatening the slow economic recovery.....and above all....ignore all hysterical rantings by multi-millionaire talking heads warning us that we're all going to perish in some fiscal cliff disaster.
There is no fiscal cliff.....they're lying and exaggerating.....just as they did over WMD's that didn't exist.