Let’s review a bit of history. Does anyone in the media recall what gave rise to the fiscal cliff? Anyone? Anyone at all? Apparently not.
To be fair, ‘Puter shouldn’t judge the Washington press corps for its faulty recollection of such ancient history. It’s not as if the Fourth Estate, the self-proclaimed quis custiodiet ipsos custodes, could be expected to have anything more than a hazy recollection of a time before most of them were born, a time we Gormogons fondly refer to as ”August 2011.”
You see, we ancient and long-lived Gormogons recall with great fondness that distant time before internet and smart phones. In those days, ‘Puter’d tie an onion to his belt, which was the style at the time. Now, to take the ferry cost a nickel, and in those days, nickels had pictures of bumblebees on ‘em. “Give me five bees for a quarter,” the Czar’d say.
Now where were we? That’s right. Back in August of dickety-eleven. We had to say “dickety” because the Kaiser had stolen our word “twenty.” America was butting up against its debt limit, and America’s lickspittle, toadying media was engrossed in stealing yet another election for the Democrats.
Sure, sequestration just kicked the fiscal can down the road, but it was the best Congress and the President could do at the time, without sacrificing the world’s belief in America’s debt as the last safe place to store one’s wealth.
Our genius press corps, too dim to comprehend fully and explain succinctly sequestration to Americans resorted to the last refuge of the quasi-literate media elite: scary sound bites, tailored to boost ratings/readership by terrifying Americans. Hence, with the imprimatur of the Gray Lady, sequestration was dubbed “The Fiscal Cliff,” and defined to mean “bad Republicans want to steal Meemaw Ethel’s social security check and prevent her from receiving a hip replacement after those self-same Republicans take away her ObamaPhones 4s.”
In reality, sequestration was a bargain between Democrats and Republicans where Democrats got a $2.4 trillion increase on America’s credit card to finance bankrupt green energy companies and auto union bailouts, and Republicans got what they deserved, a screwing. Really, Republicans bargained for automatic cuts totaling $2.4 trillion over 10 years in the event Congress failed to enact the recommendations of a to-be-formed bipartisan deficit reduction committee. Congress has yet to enact the Simpson-Bowles committee’s recommendations, so here America stands, with automatic spending cuts and tax increases set to occur at the stroke of midnight, 31 December 2012.
Most of the media and many Americans live in this Democrat fantasy world, where money not only grows on trees, but where you don’t even have to harvest it yourself: the government hires people to do it for you. All you do is sit back in your Section 8 housing, texting your fellow 47%ers on your ObamaPhone and wait for your monthly Fair Share Allotment to roll in. Sweet gig, eh?
Unlike Democrats and their fellow travelers in media, ‘Puter refuses to sell drink the Kool Aid. ‘Puter chooses to see the world as it is, not as he wishes it were. Sequestration isn’t some terrifying event looming just over the horizon, hellbent on dooming us all. Sequestration is nothing more than governmental acknowledgement of fiscal reality, an admission that spending and revenues (taxes) should balance, and America must repay its just debt.
So what are the two parties’ current positions on sequestration?
Democrats want to raise income tax rates on “the rich” (as yet undefined) in order to avoid reining in out of control entitlement programs. How this in any manner balances the budget escapes ‘Puter, but he imagines it to be some populist, spittle-flecked Ed Schultz argument based in no small part on the Underpants Gnomes economic model.
Republicans want to reform the tax code to remove loopholes, thereby increasing effective tax rates on many Americans and reform entitlement programs, thereby reducing spending in future years.
Most rational Americans believe that the best approach is to increase revenues by closing loopholes and decreasing spending by wholesale entitlement reform, which is basically what the Simpson-Bowles commission recommended.
This approach also most closely aligns with the Republicans’ approach, which has reality on its side.
In considering the best path forward, here are some handy facts for you as you listen to the media ram the Democrats’ something-for-nothing fairy tale “solution” to America’s fiscal mess down your throat:
· In 2009, the year of President Obama’s term, the aggregate national debt was $11.9 trillion. In 2012, the current year of President Obama’s terms, the aggregate national debt was $16.0 trillion.
· In January 2009, the first month of President Obama’s term, the average interest rate on national debt was 4.615% per annum. In October 2012, the most recent full month of President Obama’s term, the average interest rate on national debt was 2.560% per annum.
· Newly reelected President Obama proposed a FY 2013 federal budget of $3.803 trillion. Curiously, President Obama only projected $2.902 trillion in federal revenue (taxes), leaving a budget year deficit of $901 billion.
· In 2010, the bottom fifty percent’s AGI was $1.07 trillion comprising 12.75% of the nation’s AGI, paying 2.70% of America’s income tax receipts. The bottom fifty percent accounted for about 70 million returns in total.
· In 2009 according to the Congressional Budget Office, taking all federal taxes together including payroll and income taxes together as of 2009, the top quintile paid 67.9% of all federal tax liabilities. (Link opens in Excel; see Table 2). The top two quintiles paid 86.2% of all federal tax liabilities. The lowest 60% of Americans earners paid just 13.5% of all federal tax liabilities. The lowest 40% of income earners paid a meager 4.1% of America’s upkeep.
Here are some indisputable conclusions sane people can reach from the facts.*
· The federal government will take no action to balance its budget unless forced to by law, the courts or external events, such as the failure of a bond offering.
· Welfare programs (including Social Security and Medicare) cost more than the federal government takes in each year. Everything else America does, from providing for the common defense to protecting the environment is placed on America’s credit card.
· Half the country pays 97.30% of the nation’s income taxes. The bottom half of our nation pays next to nothing. Both halves of the country can vote. A majority of the country has a vested interest in voting for higher income taxes on the non-majority.
· If the federal government instituted a 100% income tax rate on ALL income tax filers, it would take two years to repay the national debt, assuming interest did not accrue, which it does.
· If the federal government instituted a 59% tax rate on the first dollar of the top one percent’s annual income, it would just barely break even, assuming no increase to federal spending, which will never happen.
· Mitt Romney’s off-the-cuff comment that 47% of Americans freeload off the remaining 53% was factually accurate. Democrats’ hissy fit and self-righteous riposte that Romney failed to consider that 81.9% of Americans pay income tax, payroll tax or both is misleading and incomplete. Facts show that Romney was wrong only because the percentage of freeloaders should have been higher than he claimed. The top forty percent of American income earners pay 86.2% of the federal government’s entire cost.
· If your household makes more than $67,280 per year, you should prepare for significantly higher taxes because you’re what Democrats consider rich, meaning you’re part of a group that (1) has money and (2) does not constitute a voting majority. The federal government has no intent of cutting its welfare programs (including Social Security and Medicare), nor will it increase taxes on the alleged “poor.” Like Willie Sutton, the federal government taxes you because that’s where the money is.
· President Obama has currently been president for 1.7% of America’s history assuming a 1776 national birthday. If we assume the ratification of the Constitution in 1790 as America’s birthday, then President Obama has presided over a whopping 1.8% of our nation’s history. In these four short years, President Obama has accumulated more than 25% of the nation’s debt.
‘Puter’s takeaway, after all the facts and figures, is simply this. If Americans can spend other people’s money without immediate personal consequence, they will do so regardless of longer term impact on self and country. ‘Puter fears that America hit the tipping point some time shortly after 2008, and that only a national economic meltdown on par with Greece will cause us to correct our course.
*’Puter forgot one. Interest rates are at historic lows. As soon as the economy heats up, or as soon as it craps the bed, interest rates are going up. The cost of debt service (interest payments) will go up commensurately, meaning simply paying interest on America’s credit card will squeeze out other little things the government does, like defend the country and provide ObamaPhones.