Fiscal Cliff Explained

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Joe Kawfi
Joe Kawfi's picture
Joined: 07/20/2009

"Fiscal Cliff" put in much better perspective:

Lesson #1
U.S. Tax Revenue: $2,170,000,000,000
Federal Budget: $3,820,000,000,000
New Debt: $1,650,000,000,000
National Debt: $14,271,000,000,000
Recent Budget Cuts: $38,500,000,

Let's now remove 8 zeros and pretend it's a household budget:

Annual Family Income: $21,700
Money the Family spends each year: $38,200
New Debt on the Credit Card: $16,500
Outstanding Balance on the Credit Card: $142,710
Total Budget Cuts so Far: $38.50

Got it??? Ok now.....

Lesson #2
Here's a way to look at the debt ceiling:
Let's say you come home from work and find that there has been a sewer backup in your neighborhood.....

Your home has raw sewage in it all the way up to the ceiling. What should you do....
Raise the ceiling or remove the sewage.

The dumba**es in Washington want to raise the ceiling and take on more debt and do nothing about the true cause of the fiscal problems that we face, which is out of control spending.
Too bad we have a complete numbskull as 'president' and a complicit, do-nothing Congress and Senat. This idiot president can't even get a budget passed. How pathetic is that?

Cyclist's picture
Joined: 05/15/2007
The Fiscal Cliff...

for Dummies.

The hard, cold and cruel fact is we can no longer afford this nation.

Even with the budget sequestration and increased taxes on everyone due to the fiscal cliff, the public debt will continue to grow.

The nasty thingy is with the snap-back of federal taxes, we'll all have less money to buy goods which well hobble the economy thus cutting tax revenues and further exaggerating the problem.

PTC Observer
PTC Observer's picture
Joined: 04/23/2007
Fiscal Cliff - So?

So, what can we do? Well there are a number of things that can be done but it takes an educated and informed citizenry to demand them. Here are things that can be done, no matter how unrealistic they may seem at the moment, there will come a time when citizens will demand changes to have a better life. This I predict some of these changes will be enacted end of this decade at the earliest.

1. Above all else, restrict the vote to eliminate conflicts of interest. If you work for the government, or derive your income in any way from the government, you can't vote. It is a conflict of interest.

2. Dramatically reduce central government spending; at a minimum significantly reduce the rate of spending increase, do this each year for four years until there is no increase.

3. Reduce taxes just above the rate of reduction in spending – net result is to reduce spending more than taxes thus reducing the national debt.

4. Recognize and reward risk taking, savings and capital formation -
a. Incent innovation by giving tax credits on R&D expenditures, possibly 110% of expenditures.
b. Reduce capital gains taxes to zero
c. Eliminate inheritance taxes
d. Overhaul patent laws that are outmoded.
e. Eliminate taxes on savings interest

5. Attack the problems related to Trial Lawyers – Tort reform in every sector of the economy – key provision is to make the loser pay the legal bills for all involved.

6. Minimize government regulation and thus unleash the full intellectual capacity of the country. Remember that regulation does two things to make the country less competitive; a. it drains resources away from productive effort, and b. it comparatively puts the US at competitive disadvantage to those countries that have no such regulations. Pass legislation to toughen penalties on defective products, and negligence by unprincipled businessmen. Throw the book at them when they are guilty no matter how wealthy they are.

7. Drive government decision making to the local level and give local authorities more say on how they use the people’s money. It makes no sense to send money to the central government and have them give it back to local government. It is not efficient from a economic standpoint.

8. Reduce military spending as a percentage of GDP – we don’t need to be the world’s police. Protect our boarders and our people at home. Build the wall on the southern border or whatever it takes to protect our national sovereignty.

9. Eliminate corporate welfare – we need to stop protecting unproductive neo-capitalists with political payoffs funded by our tax dollars.

10. Get out of Banking & private business – initial efforts to inflate the money supply following the collapse of weaker institutions was the right thing to do to avert a panic and the FED may need to do this again, but government needs to let weaker banks and other companies fail no matter how big they are. If they can’t compete they can’t compete, just that simple.

11. Incent legal immigration of scientists, physicians, nurses, mathematicians, and wealthy individuals to the United States.

12. Slowly dismantle the Federal Reserve Bank (a private bank that controls the money supply).

13. Return to a gold standard or something like it. For those that don’t understand this notion, the reason we have major cycles in our economy is due primarily to the FED trying to manipulate the money supply. Tie the currency to a precious metal and currency can’t inflate because you can increase the supply of the metal quickly.

14. Require the Senate to confirm judicial appointments within a session or the appointee gets a pass into the court system without a Senate vote. If the appointee is appointed late in a session they have until the end of the next session.

If we do these things at a minimum, we will ignite the mighty engine once again. Things are going to get worse folks and we're going to be a lot poorer country......before we come to our senses and we begin to organize our political system based on Natural Law and free markets.

Cyclist's picture
Joined: 05/15/2007
PTC O - Educated and...

informed citizenry.

Gee, this will mean that more will see through this "hope and change" stuff.

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