But rather than rant about the general insanity, let's look at some of the details to truly understand how idiotic and insane this fiscal cliff deal is:
1) The most general question one could ask is how does this deal fix our national debt problem? From a traditional definition of national debt, the country has run up a national debt of over $16.3 TRILLION. This comes out to a debt burden of over $50,000 for every man, woman, and child in the country. It is over $140,000 for every U.S. household.
The following graph contains two bars. The left hand bar is the amount of money that the Federal government overspent its tax stream in 2012, i.e. the spending deficit. It was over $1 TRILLION. The right hand bar is the amount of additional annual tax revenue the Federal government will see by taxing wealthier Americans under the fiscal cliff deal. Thus, just from a graphical perspective, taxing the rich will come nowhere close to overcoming the insane overspending of the Federal government and the Washington political class (double click on the graph for a bigger view):
2) But let’s step deeper into the numbers behind this graph to really understand how this deal solves nothing and makes a bad situation worse:
- Taxing the rich in 2012 under the terms of the fiscal cliff deal would have raised 2012 Federal government revenues by just over $60 billion. This is only 5.69% vs. 2012 deficit, which explains why the left bar above is so much high (almost 20 times higher) than the right bar. Washington has a gross overspending problem, not an under taxation problem.
- If you extrapolate the tax the rich terms of the deal out for ten years AND the current national debt was frozen at the current level, Federal government tax revenue from the deal would account for only 3.8% of the CURRENT national debt load. Again, no matter how much you raise the taxes of the wealthier Americans, it is only a small fraction of the gross overspending habits of Washington.
- But we all know that freezing the debt load at $16.3 TRILLION will never happen with the current set of politicians in Washington. This fiscal cliff deal will add over $3.9 additional dollars of debt to our current level (since reducing spending was never included in the deal) and realistic estimates of the growth in debt under current Washington budget projections will add another $9 TRILLION of debt in the next ten years. $16.3 TRILLION + $3.9 TRILLION + $9 TRILLION = $29.2 TRILLION in national debt by 2023. This fiscal cliff deal will raise enough additional tax revenue to cover only about 2.12% of that load.
By the way, if this realistic estimate of $29.2 TRILLION comes to pass, the individual debt burden on every man, woman, and child in this country would be almost $93,000 a piece.
The other way to look at these depressing numbers is to consider the fact that our economy, and our democracy, will likely crash long before the $29.2 TRILLION level is reached due to our government’s inability to rein in spending and live within the country’s fiscal means.
Devastating numbers, depressing numbers. The reality is staring everyone in the face. Most rational, sane Americans realize that these debt levels are unsustainable and insane. Unfortunately, those that do not recognize these simple facts all seem to have been elected to Federal political offices.
3) But believe it or not, the deal is even worse than the stark realities calculated and graphed above. Why? Because in these dark debt and economic times, our politicians took the time to include even more wasteful spending in the fiscal cliff deal, deepening our debt pit even more (source: January 1, 2013 ABC News report:
http://abcnews.go.com/blogs/politics/2013/01/fiscal-cliff-deal-also-doles-out-millions-for-hollywood-railroads-rum-producers/):
• Almost half a billion dollars in tax breaks, $430 million, was included in the deal for Hollywood through “special expensing rules,” tax rules that encourage TV and film production in the United States. Producers can expense up to $15 million of costs for their projects. Funny how these are the same people that overwhelmingly voted for, supported, and raised money for Democrats in the last election.
• $331 million was tucked into the deal for railroad companies which allows short-line and regional railroad operators to claim a tax credit up to 50% of the cost to maintain tracks that they own or lease. Funny how one of the biggest supporters of Obama and Democrats is Warren Buffet whose companies are big players in the railroad business.
•$222 million for Puerto Rico and the Virgin Islands through returned excise taxes collected by the Federal government on rum produced in the islands and imported to the mainland.
•$70 million for NASCAR by extending a “7-year cost recovery period for certain motor sports racing track facilities.” Why should private companies like NASCAR, and railroad companies and movie studios, get free taxpayer wealth when we are in the midst of this national debt crisis? In fact, when should these types of businesses ever get taxpayer wealth?
•The wind production tax credit (PTC) was extended for 1 year, along with several additional targeted tax credits for renewable energy, at a cost of $12 billion.
•$59 million for algae growers through tax credits to encourage production of “cellulosic biofuel” at up to $1.01 per gallon. Funny how when Obama hands out taxpayer money to alternative energy companies (e.g. Solyndra) we later find out that one of his political supporters was the beneficiary. Thus, it would not surprise many of us if that was the case here.
•$4 million for electric motorcycle makers by expanding an existing green-energy tax credit for buyers of plug-in vehicles to include electric motorbikes. What a waste.
Disgusting. We are drowning in debt, the economy is weak, Americans are being taxed more and more heavily, and these people take every opportunity to take care of their political supporters, the health of the country and the economy be damned.
4) Oh, but it gets even worse. According to a report from CNS News and other news sources, multiple Senate contacts have confirmed that our esteemed Senators received the bill at approximately 1:36 AM on Jan. 1, 2013, just three minutes before they voted to approve it at 1:39 AM. This is governing from the Nancy Pelosi school of government, i.e. “we have to pass the bill to see what is in it.”
If this is true, and there are enough news sources out there saying it actually did happen in three minutes, then these people in the Senate need to be removed from office for dereliction of duty. This was not a new Post Office they were naming, this is the future financial and economic health of the country and they failed miserably at their jobs.
5) But I am not alone in disappointment with this process and insanity. Consider the headlines from major news sources, many of which are usually severe Obama supporters:
•The Atlantic: “There Are No Spending Cuts In This Deal.” (Derek Thompson, “Fiscal Cliff Deal FAQ: What Just Happened And What It Means For You,” The Atlantic, 1/2/13)
•The New York Times: “And It Includes Almost No Spending Cuts.” (David Leonhardt, “For Obama, A Victory That Also Holds Risks,” The New York Times, 1/2/13)
•The Associated Press: “[The Fiscal Cliff Deal] Puts Off The Toughest Decisions About Spending Cuts…” (Charles Babington, “Analysis: Cliff Deal Is Another Pain-Free Punt,” The Associated Press, 1/3/13)
•The Washington Post: “[Fiscal Cliff Deal] Will Do Little To Address The Nation’s Long-Term Debt.” (Editorial, “Congress’s feeble finish to the ‘fiscal cliff’ fiasco,” The Washington Post, 1/1/13)
•The Washington Post: “The Deal Will Not Reduce Future Deficits Much…” (Editorial, “Congress’s Feeble Finish To The ‘Fiscal Cliff’ Fiasco,” The Washington Post, 1/1/13)
•Reuters: “It ‘Kicked The Can Down The Road’ To A Later Date.” (Kim Dixon, “Analysis: ‘Fiscal Cliff’ Deal Called A Dud On Deficit Front,” Reuters, 1/1/13)
•The Washington Times: “‘Conversation’ On Deficit Falls On Deaf Ears” (David Sherfinski, “Conversation On Deficit Falls On Deaf Ears,” The Washington Times, 12/31/12)
•POLITICO: “But The Measure Took Two Steps Back For Each Step Forward.” (Jonathan Allen, “112th Congress Legacy: Unfinished Business,” POLITICO, 1/2/13)
•Fix The Debt Founders Alan Simpson And Erskine Bowles: “The Deal Approved Today Is Truly A Missed Opportunity To Do Something Big To Reduce Our Long-Term Fiscal Problems…” (Press Release, Statement From The Campaign To Fix The Debt Co-Founders Erskine Bowles And Alan Simpson, 1/1/13)
I have been writing about political class insanity for over three years in this blog. I thought I had seen it all from political corruption to wasteful government spending to idiotic spending to bad priorities, etc. But nowhere before have I seen such a disgraceful piece of governing than this whole fiscal deal fiasco.
It was bad economics, bad governing, class warfare, and insanity at its worst. It will solve nothing, the raising of anyone’s taxes is silly in light of the weak economy and the hundreds of billions of dollars the Federal government currently wastes every year. And worse of all, our national debt keeps growing unabated due solely to government overspending, not under taxation.
Two things to keep in mind. Step 39 from “Love my Country, Loathe My Government” has never been more needed. Step 39 would implement term limits for all Federal politicians. The current set of Washington politicians need to be legally and constitutionally removed from office, the damage they have wrought and their dereliction of duty requires it immediately. We will be announcing such an effort shortly and need everyone’s help who agrees that this fiscal cliff disaster is the last straw in a long line of incompetent governing.
Second, if you do not get involved in any effort to get the political class to do their jobs and curtail runaway government spending, imagine yourself ten years from now. What are you going to say when your kids or grandkids ask you why they have a $90,000 debt burden and associated heavy taxation burden to bear? Will you tell them how you did nothing when the fiscal cliff deal sealed their fate as permanent payers of our runaway, and often wasteful, spending?
********************************
My January 3, 2013 letter to my Florida Senator Bill Nelson:
Senator Nelson:
A few things up front. I am 59 years old and until the November, 2010 elections I had never voted for a Republican for national office in my life. I have never voted for a Republican president. Thus, I am not a conservative, a Republican, or a Tea Party member. I am also not rich so "taxing the rich" does not apply to me.
Nevertheless, in my 59 years, I have never seen such a dysfunctional, greedy, immature, idiotic, and embarrassing set of Washington politicians in my life, especially in light of the fiscal cliff fiasco. I wonder if you realize how much the people outside of the Beltway hold you all in contempt for the shenanigans that go on every day in D.C.
This fiscal cliff business should have been handled at least six months ago. By delaying to the last minute, you make the country and yourselves look like a bunch of dunces.
Are you people really that insane and out of touch with reality to think this fiscal cliff deal will do any good? The money it takes from the rich will just get squandered by the Federal government like every other dollar we send to you. It will take disposable income out of a very weak economy for no reason. And it is a spit in the ocean relative to our $16.3 TRILLION national debt and our long standing $86 TRILLION of unfunded liabilities.
When the country implodes from the debt load that you people never addressed, you and the rest of your peers in Congress will go down in history as the captains of the U.S. Titanic that sunk in a sea of red ink and did nothing to stop it.
For once, I want/demand someone in your office get back to me and explain this dysfunctionality of you and your friends in Congress. You are all a disgrace to our country and our heritage. Call me, email me, send me a letter or I will call your office until I get some answers of why you people are so out of touch, so pathetic when it comes to running the country.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:
www.loathemygovernment.com
It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:
http://www.reason.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com
http://www.youtube.com/watch?v=08j0sYUOb5w
No comments:
Post a Comment