The Fiscal Cliff Deal

The congress has patched together a deal on the "Fiscal Cliff" evidently. Most people are still left scratching their heads as to what the deal actually does or doesn't do to solve the problem. I still contend that this was labeled incorrectly from the start. The real debate should have been why Washington can't live up to it's own promises. The supposed spending cuts while real, are really offset mostly by budgetary increases in spending. In other words a good portion of the so called cuts actually come from non-increases. Only in the world of politics does something like this actually make any sense. If last year i spent $1000 to maintain my car and this year I plan on spending $950, that is a $50 cut. In Washington, if i had previously anticipated spending $1050, going back to $950 is a $100 cut. A difference between a 5% and a 9.5% cut.

The spending cuts were part of a previous deal when the president asked for more spending. So he got the extra money at the time for more spending in exchange for less spending later. So now they come back and say nah never mind we want even more spending. I saw a chart that shows even adjusted for inflation that federal outlays during the Obama administration are over $10k per person. The chart only went back to 1977, but it is the highest it has been in the period from 1977 till today. It is dishonest to say that the Federal Government is not fully funded, according to any measure, the government is spending more than it ever has. The problem is they never spend money wisely, that will not change even if taxes on the rich go to 100% and 50% for the rest of us. They will always say that there is more to spend on. That is a fact that will not change. And by the way if the problem is government doesn't receive enough money to support all the wonderfully successful programs, why bother with lowering any tax rates? They need to be paid for. If we value them, we need to pay for them, all of us to one degree or another.

Another item that has been latched onto to make this sound more ominous than it really is, using a 10 year number. I have tried look up how much revenue this actually raises. The number, if when mentioned, is in 10 year terms. The real number is 36 billion per year (averaged so even less in the early years), while not anything to sneeze at is a pittance considering 2013 is projected to have a 1.1 trillion deficit. So if almost all the "extra" money the Federal Government is spending comes from borrowing who cares about a paltry 36 billion? Other than to score points in the eyes of those who are envious and hateful toward those who have been (by hard work or luck) more successful financially than them. It is easier to either knock down others or blame them for why we are not as wealthy as we would like to be rather than looking at what we can be doing to make our situation better. What you choose to do or not do with your talents, time, and energy have far greater to do with where you will be. Media and politicians thrive off emphasising that someone else has more than you do.It would be far more fruitful to consider where YOU were, what your plan is going forward, and what you can do to impact that. Rather than look for others to blame. 32 billion is a measly 3.2% of the deficit.

One part of the revenue raising is to restore the temporary decrease in SS taxes collected. Which are part of "payroll taxes" as apposed to income taxes. It is all a tax on my income, i don't care what they call it. But they do, it allows them to say stupid things like "This bill does not raise income taxes on 99% of workers in the country". The fiscal cliff deal does however raise taxes on all workers. For those worried about the budget and what we actually spend money on consider this. The 3 largest areas of growth have been defense, medicare, and medicaid. All of which have growth better than 75% over the last ten years. This is where the money is going, over 600 billion increase over 10 years in these 3 programs alone. If averaging, than the 60 billion these programs will grow already dwarfs the amount of the new revenue. I will end this post by saying I don't know how any reasonable person can conclude that the issue is with revenue. Almost no one whats to pay more, the standard of living has not moved in 10 years, and we can't extract enough from even the top 2% to get enough money to pay for the government we have. The real issue is, we can't pay for the government we have, it needs to be cut. The deficits we are running will make the eventual interest payments even higher, leaving even less money for the programs the american people need.