cliffhangers

Allow me to begin with a semi-sarcastic disclaimer:  this isn’t my favorite topic.  While the Intramuralist focuses on respectful opining and dialoguing about the inherent wisdom or lack of it within current events, to focus on what may appear to be merely economics (yes, a core requirement of both my college degrees) isn’t exactly my favorite thing to do.  The challenge, though, is that our nation’s current economic state — and how we got here, accompanied by the current rhetorical wrangling — is full of wise and foolish approaches.  It is thus time we, too, focus on the colloquial “fiscal cliff.”

 

For those of you who have yet to turn back on your news after all the election hyperbole, you may have missed the cliffhanger reference.  From ‘tweets’ to television, the airwaves are rampant…

 

“Does anyone realize the people who created the fiscal cliff are the ones negotiating to get us out?”

 

“We already fell off the Moral Cliff a while ago, which was the precursor to the Fiscal Cliff.”

 

Or my current personal favorite…

 

“Wonder how long Wile E. Coyote has been waiting with his giant anvil at the edge of the Fiscal Cliff…”

 

Friends, I cannot stress enough that if you are receiving your news from strictly a partisan source (i.e. Rush Limbaugh or Rachel Maddow), your perspective will be skewed.  The Limbaugh’s and Maddow’s of the media continue to cast all blame elsewhere, and in my opinion, neither exhibit the humility necessary on a consistent basis to wisely tackle truth.

 

We are not in this fragile fiscal state because of any one president named Bush or Obama, any war in Afghanistan or Iraq, or any entitlement such as health care or housing assistance.  We are in this fragile fiscal state for 2 basic reasons:

 

(1) For years, our federal government has spent more than it takes in.

 

And (2) For years, presidents and congress have justified the spending.

 

Now it is true that multiple aspects have impacted the frail economy… the wars were expensive; Obamacare is expensive; national defense is expensive.  Social Security runs on a deficit budget.  The post office, Medicare, and Medicaid all spend more money than they take in.  I often stand amazed observing lobbyists and special interest groups (and too frequently, the politicians to whom they donate money) loudly proclaim their passion for the entitlement from which they most, specifically benefit.  The time, friends, for passionate proclamations trumping fiscal soundness has come to a halt…  albeit the screeching halt at the end of a so-called cliff.

 

This cliff is the result of those in Washington (and the lobbyists shouting behind them) being unable to agree on how to solve reasons number 1 and 2 above.  When they could not agree on a responsible budget approach and debt limit over the last 2 years, legislators agreed to sequestration, the formal term for mandatory cuts to federal programs.  Hence, if congress and the administration do not come to an agreement now — and also, if they do not de-prioritize their passionate proclamations — $1.2 trillion will be made in mandatory cuts – half from the military, half from domestic programs.  Health, education, military staffing, and benefits will likely all be significantly affected.  All tax brackets may be significantly negatively affected.

 

Why not simply raise taxes?  Great question.  Some propose this passionately.  “Tax the rich; they can afford it!”  Others oppose it with seemingly equal venom.  “You can’t tax the rich; they’re the job creators!”  Yet regardless of whether or not a tax-em’-all-more strategy is economically sound and/or effective, the reality is that the sobering challenge still remains…

 

… the challenge is that raising taxes alone will not alter reasons number 1 and 2 shared above.  The federal government cannot keep spending more than it takes in; and it cannot keep justifying the spending.

 

Respectfully,

AR