Regular readers (and yes, there are some) may have noticed that I wrote nothing concerning the so-called fiscal cliff until now. One reason was the fact that my arguments would not have been appreciably different from those of any number of other commentators. The other, as outlined in the column, was that the course of events was predictable. Besides, I was waiting to see the specifics of the deal we all knew was coming (and this column may be thought of as a companion piece to my last one).
The 10:1 ratio of tax increases to spending cuts was the
lowest CBO “scoring” that I found; an earlier such scoring from the same source
was more like 41:1. I used the lower
figure on purpose, so as to not be accused of exaggerating or inflating my
figures.
Other issues the fiscal cliff compromise did not address
are:
-four consecutive years of $1 trillion plus deficits
(with no end in sight)
·
-the $48 trillion shortfalls in Social Security,
Medicare, and Medicaid
·
-the fact that Social Security has run deficits
for each of the last two years ($49 billion in 2010 and $45 billion in 2011) and
is projected to do so from now on
·
-the last time both houses of Congress voted on
an actual budget was April 2009 (the House of Representatives, under GOP
control, passed budget resolutions in 2011 and 2012 but the Senate did not)
·
-the fact that according to the Congressional
Budget Office the compromise will result in an additional $4 trillion in budget
deficits over the next decade.
And, of course, the compromise was chock full of special
interest tax breaks and giveaways.
Remember, though, that if the mythical “rich” would just pay
their fair share, all will be well (that’s sarcasm, by the way).
For a very brief history of past budget deals in which tax
increases happened, but the promised spending cuts did not, see this from Cal
Thomas:
For a very brief review of the four different budget deficit
“commissions” that have come and gone since 2010 (Domenici-Rivlin,
Bowles-Simpson, Gang of Six, and Biden) that preceded the most recent Joint
Select Committee on Deficit Reduction (the “super-committee”), see:
For a very brief review of the various provisions of the 150-plus
page fiscal cliff compromise, see:
For many of the statistics cited, see Federal Spending by
the Numbers 2012 by the Thomas A. Roe Institute for Economic Policy Studies at
the Heritage Foundation (specific references used in the report come
predominantly from the Congressional Budget Office, the Congressional Research
Service, and the Office of Management and Budget). I advise readers to digest the full report,
as it outlines various facets of the astonishingly dismal fiscal situation
awaiting us (and no matter how bad you think that it is, the reality is worse). See:
For more on Americans for Limited Government’s calculation
that 88% of the new revenue raised by the compromise will be need to pay
interest on the new debt that it creates, see:
For more on tax cheat Geithner’s “creative” accounting to
forestall traversing the debt ceiling, see this from State Budget Solutions:
Addendum - My point was not that the Social Security tax
holiday stimulated economic growth, which in my opinion was always a
debatable proposition because smart folks have been either saving the
extra income or paying down debt (though I did appreciate hanging on to a
bit more of my own money), but rather that while everyone's attention
was directed toward soaking the "rich" the reality was that taxes were
going up on us all - as usual.
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