Okay, I am going to go out on a limb here and say that it is time to drive off the fiscal cliff. I don’t like it totally, but I don’t see another option that works. I’ll tell you why going off the cliff is the best worst option.
The Obama Administration has flat-out said that there will be no deal on the fiscal cliff unless they agree to raise the rates on the wealthiest 2% of Americans. You know the same people who pay the lions share of the taxes to begin with. They want those rates back to 40% of their income up from the 35% they currently pay, and they say it is a matter of math. Well here is some math for you, you could take all the gathered wealth from the top 10% of the country and it wouldn’t make a dent in the debt, it wouldn’t run the country for a month, how are you going to generate that kind of income by raising taxes a smidge. Not to mention the administration does not want to cut any entitlement program despite their bloated budgets driving this bus off the cliff, oh and they want more stimulus spending.
Well, guess what, we have a stalemate. If I were the RNC I would recommend going off the cliff. One spending cuts will be automatic, there won’t be any dodging it. Cuts totaling $110 billion per year will be applied from 2013 to 2022, split evenly ($55 billion each) between defense and non-defense discretionary spending. For scale, discretionary funding for 2011 totaled $1,277 billion: budget authority of $712 billion for defense and funding totaling $566 billion for non-defense activities. Here is the deal, the defense industry will be hit hard, but the military will make do with what they have, they always manage, it may not be easy.
Who is going to be hurt, well, all those defense contractors are going to have to lay off people. A lot of those contractors are in the blue blue portions of Virginia and Maryland, I guess some will end up on Welfare once they lose their jobs. We’ll face a double dip recession and probably post a negative growth rate, and estimated negative one half percent, and the unemployment rate might go up as high as 9.1 percent. But the republicans could easily block the extension of unemployment benefits, saving yet more money from being poured down the drain.
The up side is that the administration would get their tax increases on the rich just like they want if they go off the cliff, they’ll also get tax increases on everyone else, which lets face it, is only fair, and isn’t that we as a country are about, fairness and social justice…well you get those things when you tax everyone.
The only major problem with this is that the media and the administration would blame the republicans or Bush for the recession, tax rates, unemployment rates, etc. and the media would be down with it. They are already the lap dog of the Democratic party, and like a good little animal won’t bite the hand feeding them all the juicy tidbits of the administration. So the counter is for the RNC to buy ad time and start throwing the administration under the bus. It works if you do it often enough.
I say, cut the nonsense and go off the cliff, or cut all the useless spending, and by useless I mean all the entitlement programs.