As 1 Jan, 2013 creeps ever closer without a deal on the budget that fiscal cliff gets bigger and bigger in the windshield of the American economy. The problem is that neither side wants to give any ground to the other. The other real problem is that most of them don’t understand what needs to be done. People, coming to a budget agreement is the least of our worries. You also have a debt ceiling to deal with, a 16 trillion-dollar deficit that has gone up 5 trillion dollars in three and a half years, and two major entitlement programs that are only growing every day. These whoppers tend to be the things bleeding the American economy dry. And then you have Timothy Geithner.
The man for all his economic prowess is underqualified to be the Secretary of the Treasury. First, he is an administration sock puppet, and second he is a dumb SOB who failed to pay mandatory taxes back in the day. Finally, and most importantly, he doesn’t understand the basic concepts of M3, hell the central bank hasn’t tracked the supply of M3 (M2 = money and close substitutes in circ, used to forecast inflation + large and long-term deposits, large liquid assets is what M3 is made of) since 2006. I wonder if that is because the amount of M3 is significantly smaller now than it was pre-2008. I’d have to do some deep digging to find that one out.
Instead he comes to congress with a plan so laughable they actually laughed him out of the room, really, laughed in his face. Seems that idiot Geithner wanted to raise tax revenues by 1.6 Trillion while reducing the deficit by 4 trillion over the next ten years. Okay, it is a start, I’m listening. Then 50 billion in stimulus spending and give the president the power to raise the debt ceiling without consulting congress. What? You’re going to reduce the deficit, why do you need the power to raise the debt ceiling? Why more stimulus spending, the first three rounds did almost nothing. Also no spending cuts for the first year, for all of that the government would cut $400 Billion from entitlement spending.
All fine and dandy but entitlement spending for FY2012 was purported to be about 1.9 Trillion dollars and for FY2013 it will be about 2.1 Trillion dollars. Cutting the spending by 400 billion is a nineteen percent reduction in entitlement spending.
What we need is a thirty percent reduction in entitlement spending, followed by a cap restricting growth of the entitlement system and a raise in the age of those eligible to get social security pushing it back to 70. Then you cut other spending, and maybe you can raise some taxes, but simply raising the taxes on the richest isn’t going to cut it.
You aren’t going to reduce the deficit by four trillion dollars this way, it just doesn’t make mathematical sense. Besides that, why leak this little bit of information from a secret meeting. Weren’t we promised transparency? Are we getting any, or are we stuck getting what they feed us? Now there are rumors that congress may be sniffing around the 401K. First proposed by an economist back in 2008, sources say that congress is again looking at nationalizing the 401K and turning it into a three percent growth retirement fund rolled into the social security fund. While it is just in the wings of discussion again, this could have and effect on 20% of the population. Seizing wealth or making deductions disappear is not a way to fix the problems we face.
We need a budget, we need a spending plan, and we need to sit down and take a pair of scissors to the things that are getting out of control.