For John, BLUF: We aren't out of the Federal Fiscal Forest yet and thinking we can find our way out by raising taxes indicates a lack of math skills. Nothing to see here; just move along.
Over at The Washington Examiner is a Commentary by Joel Gehrke regarding President Obama's plan to fix the Fiscal Cliff. Per the article, and the accompanying video, the President sees the current increase in taxes as just a down payment, with more to come for the richer members of our society.
Obviously, there is still more to do when it comes to reducing our debt. And I’m willing to do more, as long as we do it in a balanced way that doesn't put all the burden on seniors or students or middle class burdens but also asks the wealthiest Americans to contribute and pay their fair share.So, at this point the deal agreed by the US Congress earlier in the week is about a lot of taxes and a few spending reductions. What is it going to be at the end of February? The President seems to be saying it will be more taxes on the wealthy. The problem is that we can not tax our way out of this problem. There is not enough income out there to be taxed.
Worst case scenario? We become the "Weimar Republic" (Germany from August 1919 through to January of 1933). Wikipedia says "Princeton historian Harold James argues that there was a clear link between economic decline and people turning to extremist politics."♠
Solutions? Belt tightening. My youngest son said to his Mother, the other day, that we don't need the Social Security we are drawing, since we are well off (we own our home outright). That was a little over the top, but he is on the right path. What we are giving to ourselves as the elderly, as students, as government employees, as farmers, as the unemployed, may have to be trimmed here and there. And, we may have to increase taxes some more, on all of us.♥
Regards — Cliff
♠ James, Harold, "Economic Reasons for the Collapse of the Weimar Republic", in Weimar: Why Did German Democracy Fail, ed. Ian Kershaw, Widenfeld and Nicolson, (London: 1990), pp 30–57. When we say extremism, be are not talking about the kind of differences we have here in these United States. We are talking much worse.
♥ Dirty little secret. Everyone will be seeing more taxes this year.