Fixing The Fiscal Hole

Everyone by now has heard of the upcoming "Fiscal Cliff", the expected effect of a number of laws which, unless changed, could result in tax increases, spending cuts, and a corresponding reduction in the budget deficit beginning in 2013. Many economists expect that the end result of the fiscal cliff will be another recession. Will the President and Congress reach an agreement for the well being of this country or will they continue in their petty fights before they drag us into a bottomless pit with them? Will there be bipartisan agreement or will each side emerge
with a "victory" for their political supporters? Will they come to theirs senses and put the American people first or will this be just another round of partisan line battles surely geared towards mutual defeat?

The tax increases and spending cuts that are due to take place by January 1, 2013 are expected to automatically slash the federal budget deficit by $503 billion, according to the most recent Congressional Budget Office (CBO) projections. In addition, over the next ten years, projected increases in the United States public debt (money borrowed by the federal government of the United States through the issue of securities by the Treasury and other federal government agencies) would be lowered by as much as $7.1 trillion or about 70%, resulting in a considerably lower ratio of debt relative to the size of the economy. On 21 November 2012, debt held by the public was approximately $11.45 trillion or about 72% of GDP. Also, As of September 2012, $5.5 trillion or approximately 48% of the debt held by the public was owned by foreign investors, the largest of which were China and Japan at just over $1.1 trillion each.

The stats above do not seem to be so bad. However, the immediate spending reduction with an increase in revenues in a weak economy may push the United States back into a recession and many fear into a depression. The main problem of our fiscal current situation is simple math, you do not need a Phd in economics to figure this out; the federal government spends more than the income it generates. They have been poor managers of the financial resources entrusted to them by the people of this country. This must change!

We must address the root of the problem. We must end unfair tax policies that encourage U.S. corporations to ship jobs overseas and receive tax breaks for doing so. From 2008 to 2010, at least 30 Fortune 500 companies —including PepsiCo, Verizon, Wells Fargo, and DuPont—paid more for lobbyists than they did in taxes. They collectively spent $476 million sucking up to Congress, buying protection for tax breaks and special subsidies, and corrupting the souls of politicians. The US Congress has turned into a harlot filled with prostitues available to the highest bidders. We must encourage entrepreneurship in the United States but not at the cost of the American people to pick up the tax bill.

What are the politicians going to do differently this time? Are they going to increase taxes? Are they going to reduce spending? The reality is Washington, DC cannot solve all their past mismanagement simply by over-taxing the people that voted them into office nor by eliminating programs that are necessary. The decision facing this congress when they return to Washington is not easy, but must be done by putting the
people of the United States and the future country first.

If you have not realized it yet, we have already fallen off the cliff. We must focus on climbing out of the hole which is going to be painful.