Seems to me the powers that be in Washington are edging a little closer to some type of agreement with regard to the fiscal cliff, but they’ve got a long way to go. The degree of mulishness on both sides is palpable – and ludicrous. President Barack Obama, fresh and emboldened from his re-election, is demanding that taxes be raised on the top 2 percent of earners to increase revenue by $1.6 trillion over 10 years. Obama says a blend of tax increases and budget cuts is the way to go, although he’s a little short on details of what he’d like to cut, but says the cuts would amount to $500 billion over 10 years. That’s a $2.1 trillion swing. Initially, Republicans, who run the House of Representatives, absolutely refused to go along with that. They said raising taxes on rich people – the “job creators” – would stifle an already fragile economic recovery. Republicans want to cut spending by $1.4 trillion over 10 years and raise $800 billion by eliminating exemptions and loopholes, although they’re a little short on details of what they’d eliminate. That’s a $2.2 trillion swing. Both sides say their proposals are a “framework” and details will be worked out later. But later when? They only have until the first of the year. Apparently, Republicans have the ability to read a newspaper and a Gallup poll result, because by the time I was writing this on Thursday afternoon, they were softening to the idea of raising taxes on rich people. Seems 65 percent of Americans think that’s OK, so it doesn’t make a lot of sense for Republicans to continue resisting. And besides, if the Republicans are right, and raising taxes on rich people does worsen the economy, they can blame Obama. So maybe, just maybe, there will be an agreement by Jan. 1. But I doubt it. My guess is they will come up with some creative way to kick the can down the road – some way to delay it. But the thing that strikes me as being more ridiculous than the overt intransigence with regard to this “fiscal cliff” debate, is the way our intrepid leaders are so willing to nibble around the edges of the huge problem that is our national budget. One side wants to put the budget toward the black by $2.1 trillion over 10 years. The other side wants to put the budget toward the black by $2.2 trillion over 10 years. Operative words there? “Over 10 years.” I say, let’s do both. Let’s raise the taxes on the rich people. Let’s eliminate the loopholes. Let’s eliminate the deductions. Let’s cut everything that both sides want to cut. That way, we would save $4.3 trillion dollars – OVER 10 YEARS. People, c’mon. The budget is running a deficit of $1.3 trillion PER YEAR. That means that even if they did everything that both sides are proposing – which, we know of course, has no chance of happening – it would amount to $430 billion per year in savings. That leaves a deficit of $700 billion a year. And that doesn’t even factor in the projections regarding Obamacare, which already has ballooned from its original $900 billion price tag to $2.8 trillion over those same 10 years. What is wrong with these people? Are they blind to the obvious? Don’t they care? Don’t they get it? Are they daft? I listen to Obama and Boehner get all serious and somber and talk about “difficult decisions” and “tough choices.” They point fingers at each other and play the blame game. It’s laughable. They are our leaders, yet they refuse to lead.Neither side is coming close to making a tiny dent in the budget problem. If you add their proposals together they still don’t make a meaningful dent. It’s just all political theater. It’s just a way for them to guard us from the unvarnished truth. They seem to think that they can – somehow – bring the nation back from the brink of insolvency without anyone feeling any pain. They want to keep all their favorite – and our favorite – programs largely intact and they don’t want to raise anybody’s taxes. Well, anybody but rich people’s. Any fool knows that’s just not possible. Any fool knows that the path we’re on is unsustainable. We can’t keep sucking dollars out of the private sector to fund an ever-growing federal government. We can barely keep up with entitlements like Social Security, Medicare and Medicaid, let alone the plethora of other government programs foisted upon us by well-intentioned – yet misguided – lawmakers. See, there are only so many of us (private sector employees) to fund so many of them (government employees). It’s a zero sum game and it can’t be won with smoke and mirrors. There is no way to get this nation back on track fiscally without everybody feeling some pain. Now, we can get serious about this stuff, shrink the government as needed, and manage the pain. Or we can avoid making the tough decisions and lard up the government with expansive new programs like Obamacare. We can continue to sell T-bills to prop up our trillion-dollar-a-year deficit spending problem. If we do that, the pain will come eventually. And when it does come, it will be swift and it won’t be fun. You think the economy is bad now? Wait until currency devaluation, high interest rates and hyperinflation kick in.
