Headed Off The Cliff?
Yes, If Something Doesn’t Change
Posted: November 14, 2012
With the election now history, America gets to focus on its real problems — problems it could have taken steps toward resolving if only it had not opted to preserve the political status quo.
But only Barack Obama, it seems, can get a “mulligan presidency,” a “do-over.” We, as voters, cannot ask for a “do-over election.” So we’re compelled to confront problems we all but kicked down the proverbial road by dint of the decisions we made last Tuesday.
Alas, this “road,” though, is fast coming to an end. Next stop: the “fiscal cliff.” Or not?
No, this “cliff” — an economically threatening combination of tax increases ($514 billion worth) and spending cuts ($109 billion) is quickly approaching. The question is whether we, as a nation, can take steps sufficient to hit the brakes before we plunge, like Thelma and Louise, over the precipice.
An anemic economy currently slogging along at a minuscule 1.76 annualized growth rate. Unemployment rests at 7.9 percent — or, more accurately, at a rate closer to 15 percent if you count the underemployed as well.
Nonetheless, if one looks at revenues coming into the government — individual income collections, realized under the current tax schedule (those Bush-era rates), have risen by 26 percent during the past two years — some nascent growth tendencies are in evidence. Hence, the question, to be examined in more detail below: Why blunt this budding trend by raising taxes on the folks producing the revenue?
Here’s the thing: Federal revenue receipts for fiscal 2012 almost reached the same pinnacle attained during the historic high of 2007, falling but $119 billion shy of that $2.568 trillion “take.” The rub: Spending that year checked in at $2.729 trillion for a deficit of $161 billion. Since 2009, or Mr. Obama’s first year in office, expenditures have never dropped below $3.456 trillion — and in recessionary times no less (e.g., revenues plunged as low as $2.1 trillion that same year). The result: eye-popping deficits of a trillion dollars or more four years running, and more on the way.
So, to put it forthrightly, spending is the problem. Since 2007, additional spending of roughly $800 billion — ironically, the size of Mr. Obama’s dubious “stimulus” — has become institutionalized.
If that figure is not sufficient to fog up your green eyeshades, consider this, as National Review’s Andy McCarthy observed in a recent column: Right now — right now! — we pay out $250 billion more on entitlements and debt service than we collect in taxes. That’s right, a built-in deficit of a quarter-trillion bucks before we spend a penny on the so-called discretionary budget, which includes national defense.
Pretty scary, isn’t it?
But only Barack Obama, it seems, can get a “mulligan presidency,” a “do-over.” We, as voters, cannot ask for a “do-over election.” So we’re compelled to confront problems we all but kicked down the proverbial road by dint of the decisions we made last Tuesday.
Alas, this “road,” though, is fast coming to an end. Next stop: the “fiscal cliff.” Or not?
No, this “cliff” — an economically threatening combination of tax increases ($514 billion worth) and spending cuts ($109 billion) is quickly approaching. The question is whether we, as a nation, can take steps sufficient to hit the brakes before we plunge, like Thelma and Louise, over the precipice.
An anemic economy currently slogging along at a minuscule 1.76 annualized growth rate. Unemployment rests at 7.9 percent — or, more accurately, at a rate closer to 15 percent if you count the underemployed as well.
Nonetheless, if one looks at revenues coming into the government — individual income collections, realized under the current tax schedule (those Bush-era rates), have risen by 26 percent during the past two years — some nascent growth tendencies are in evidence. Hence, the question, to be examined in more detail below: Why blunt this budding trend by raising taxes on the folks producing the revenue?
Here’s the thing: Federal revenue receipts for fiscal 2012 almost reached the same pinnacle attained during the historic high of 2007, falling but $119 billion shy of that $2.568 trillion “take.” The rub: Spending that year checked in at $2.729 trillion for a deficit of $161 billion. Since 2009, or Mr. Obama’s first year in office, expenditures have never dropped below $3.456 trillion — and in recessionary times no less (e.g., revenues plunged as low as $2.1 trillion that same year). The result: eye-popping deficits of a trillion dollars or more four years running, and more on the way.
So, to put it forthrightly, spending is the problem. Since 2007, additional spending of roughly $800 billion — ironically, the size of Mr. Obama’s dubious “stimulus” — has become institutionalized.
If that figure is not sufficient to fog up your green eyeshades, consider this, as National Review’s Andy McCarthy observed in a recent column: Right now — right now! — we pay out $250 billion more on entitlements and debt service than we collect in taxes. That’s right, a built-in deficit of a quarter-trillion bucks before we spend a penny on the so-called discretionary budget, which includes national defense.
Pretty scary, isn’t it?