Why the Fiscal Cliff Should Happen!

Over the past 12 years federal spending has skyrocketed to out of control levels. Both parties are to blame for that. The Bush administration spent billions more than it brought in on a yearly basis. The Obama administration has, and continues to spend trillions more than it brings in on a yearly basis. These are just statistics. Obama has put us in more debt than any other president. All for a 7.7% unemployment rate after 4 years, which is a horrible judge of the true unemployment rate in the first place. That is just the truth. No way around that. The American people, at least some of them, have been reaping the benefits of this out of control spending for some time now. The fiscal cliff is not something that most conservatives, at least in the form of tax hikes on everybody, would normally advocate. However, from my point of view, IT SHOULD HAPPEN. Let me explain why.

American people, the bill is due. The wars, food stamps, welfare, healthcare, social security, pet projects, etc. The politicians over promised and you let them. The bill is due, and the government is ready to collect. From a political standpoint, taxes must go up on everybody, so the electorate can see the consequences of out of control federal spending. The only way the people change their mindset, and how they vote, is to feel the pain in their wallets. This is the only way the American people will learn. I fault conservative leadership. The problem with our conservative leadership is that they implemented reckless fiscal policies. Fiscal conservatism is two pronged. First, federal taxes must be enough to fund essential, constitutional functions, no more, no less. Of course, there may be variations year to year, $50-$100 billion surpluses or deficits each year.  However, fiscal year deficits of $1+ trillion dollars have been the norm for the past 4 years. Can someone please explain this to me? The $300 billion deficits that President Bush was running were also outrageous. Second, if spending does go up for some reason, the tax code needs to adjust. Meaning that, if government wants to spend more, they have to go to the people that year, right then and there, and demand more money from them. What does this accomplish? Awareness. In a system such as this, the American people would become aware of our tax and spend situation immediately. Politicians would not be able to spend money and just pass the bill down the road to future generations. This is the greatest hope for fiscal conservatism. It would essentially be a pay as you go system. Does this mean, that Congress cannot carry out one of its constitutional functions of borrowing money on the credit of the US Government? No, but what does borrowing money come with? Interest. Somebody has to pay those interest payments. So if the federal government borrows money for funding, taxes should go up. The longer the principal is outstanding, the more interest the American people pay over time. Nobody wants to pay $5 billion for a bridge that only costed $3 billion. A system such as this would drive liberals crazy because it would hold the spendthrifts accountable, immediately. For example, we are about to pass a healthcare plan. It will cost $400 billion in additional revenue over the next five years. That means your taxes are going to go up $2,000 every year for the next 5 years. Now, American people, make a choice using the power of the ballot box.

Simply put, we have spent too much money. We have lived beyond our means. This is what you get when you put a President in office that has spent about $5.3 trillion more in four years than he has brought in over those same four years. Bush does not escape critique, however his spending was not on the same level as Obama’s. Simple math can debunk the myth that simply taxing the rich will fix the problem. Using 2010 IRS statistics proves this. Lets discuss real numbers. In 2010 the top 1% of earners paid $354 billion of the federal individual income tax. Number of federal returns filed by the top 1% of earners, 1.35 million. In 2010, the bottom 50% of income earners paid $22 billion of the federal income tax paid. There were 67.5 million returns filed which fell into the bottom 50% earner category. Now to adjusted gross income on the top 1% for 2010, which is my main point. The top 1% of income earners had AGI of $1.5 trillion. So lets tax them at 50% of adjusted gross income. We would put a $750 billion dent in the budget deficit, annually. Let’s do that for 4 years. That would equal $3 trillion dollars. It still would not equal the $5.3 trillion of spending deficits which President Obama has overseen the past four years. Still do not get it? Read that paragraph again, because it is pivotal. This gives some perspective, and hard numbers, as to why just taxing the rich will not fix the problem. The politicians count on you being uninformed about our spending situation.

To sum up my theory to conservatives. If the Democrats will not compromise on spending, let the fiscal cliff happen. Let taxes go up on the middle class, the rich, everybody. Will it hurt the economy? Maybe. However, from a political standpoint, maybe, just maybe, you will be able to show the American people that this is what you get when you have out of control spending.  The bill will eventually come due, and the American people will always be on the hook. All of them. When the Democrats start blaming the Republicans for allowing taxes to go up on the middle class. Just respond by saying, we just thought it was time to pay our past due bills, and not pass this generations’ debt burden onto the next. If you do not want it to happen again, then cut spending. If you dot not cut spending, taxes will have to be raised again, and those voting for the outrageous spending increases, will again, be to blame. The ball needs to be put back in their court, and this is something we have not tried.

This entry was posted in Taxes.

6 comments on “Why the Fiscal Cliff Should Happen!

  1. Great post. I am dealing with many of these issues as well..

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