It appears as though no deal will be made before 1-1-2013 and America will go over the fiscal cliff; resulting in higher taxes and draconian spending cuts including to the military. What does the year 2013 have in store for us?
Though I am a Republican conservative and support most of the conservative causes, I don’t blame President Obama one bit for trying to make a deal. I see his point about a tax burden to all Americans and what Obama and the Democrats seem to talk less about is the reduced levels of national security with spending cuts to the military. But it is still important that the two parties don’t make a deal just for the sake of making a deal. Like chemotherapy for a cancer patient, it is possible for the cure to be worse than the disease. As devastating as going over this proverbial cliff sounds, it could be the lesser of several evils put on the tables by both parties including those so called remedies with bipartisan support.
While Speaker John Boehner will give in on tax increases for the rich if the cutoff is $1,000,000, President Obama wants the cutoff to be $250,000. While $100,000 has become a middle-class salary, a quarter of a million dollars is still a nice lifestyle; but it is no longer considered wealthy. It is not enough to operate a business and have employees earning above minimum wage on a quarter of a million dollars in net assets, and it is nip and tuck with minimum wage earners on payroll. $250,000 basically represents the upper echelon of salaried employees; not people with potential to create jobs. The Obama plan may put the brakes on before that yellow and black warning sign in front of the cliff on 12-31-12, but it does not build a bridge over the cliff to the other side and we are still going to go over eventually with the abyss below twice as deep. If the carat is compromised on half a million dollars, we should all give it serious thought.
What I find most alarming is nobody has a plan to actually raise $16 Trillion and cure the debt. All options including going over the cliff only reduce the debt; the best plan on the table would reduce it to $4 Trillion. There are 371 billionaires in the world and a lot of millionaires. But in the history of mankind, no one has ever become a trillionaire and yet we have seen trillions on the red (negative) side. If God forbid, you implemented Marxian Utopia and stripped all wealthy Americans of all of their wealth, we would still come up short. You can’t blame either the ninety-nine or the one for not wanting to sacrifice anything when you cannot offer the grand prize of a balanced budget in return. It is only putting off the inevitable.
The recipe for a balanced budget calls for more than just two ingredients, tax increases and spending cuts. Without, entitlement reform, spending cuts are like what baseball broadcaster Tim McCarver says about pinch hitting a .280 right-hitter with a .285 right-handed hitter; eye-wash! The way to achieve entitlement reform without doing the unthinkable and leaving elderly and disabled with no means of support is to privatize whatever can be privatized. Not by vouchers, but by government contracts consolidating the essential services to one company per service and exempting them from paying corporate taxes in tern for administering the service without prejudice against things like pre-existing conditions.
Another key ingredient is currency stabilization—I have not seen one plan by either party addressing this issue. If we are going to continue with the Federal Reserve Note being our only form of currency and the only way out of (inevitable) predicaments is by printing more and devaluating more, trying to balance the budget on taxes and spending cuts is like trying to drain the bathtub with the water running. We need to put forty percent of our currency back on the Gold Standard. You cannot print more Gold Certificates than you have gold in reserve and with the 60/40 hybrid currency I propose, the government can leave itself an out. If the feds see the need to print more Federal Reserve notes, they must also certify more gold to maintain the 60/40 ratio; the result is they can print less than otherwise.
Finally, American needs to create engines of revenue outside the normal realm of taxation. To begin with, we need to tap into our domestic energy sources. Though I like to consider myself an environmentalist, some drilling and fracking is a necessary evil. Besides once we have access to a fair amount, we can invest more into scientific research toward greener, renewable energy sources; but we have to keep the lights on and the Bunsen Burners burning in the labs in the meantime, as well keeping the wheels and turbines of American society turning. We will never become completely independent on Arabian oil and shouldn’t for that matter—if we stop buying oil from Arab lands, they are more likely to organize a Jihad against Israel—right now they hate us but they love our money. But by buying that much less from them, the savings alone will be a dynamo in debt reduction.
Neither party, partisan or bipartisan, has a plan that provided any of the three ingredients I mentioned above. This is not to say I can’t be sold on something Washington conjures up on the eleventh hour; I just want to warn everyone that a deal just for the sake of making a deal may not make us any better off. Just in case, be prepared to go over the cliff!