We keep hearing about this ‘fiscal cliff’ and how both sides blame the other side for not doing enough to stop it. First of all, we are in this situation since Congress knew that they could not come up with an acceptable budget process to either raise income or cut spending or both so they threatened themselves with this fiscal cliff – actually automatic cuts that would spring into being if they could not agree. Well, of course they did not agree and now they can’t agree who to blame, when they just need to look in the mirror to see who is at fault.
The total amount of the cuts are “only” 1.2 trillion dollars over 10 years. That is 120 billion a year. Everyone is talking about how that will destroy the economy and gut both the military and domestic programs. Friends, does anyone remember that we currently have a trillion dollar deficit EACH YEAR. 120 billion is only a down payment on what needs to be done.
I do agree that random cuts are not the way any sane government should work. That is why both sides threatened themselves with the automatic cuts – to make sure they would come up with an agreement. But, naturally, they did not. Because it takes some political risk to do what needs to be done.
Raise taxes. Tax rates are lower now that they have been for decades. Back when tax rates were higher in the 50’s and 60’s, the economy seemed to move right along. But of course we did not start two wars and cut taxes back then. We believed that we should actually pay for the decisions we made.
Reform the tax code so there is some sort of fairness and simplicity. Eliminate many deductions and exemptions so that the public has the sense that everyone is playing by the same rules.
Raise the retirement age. Social Security never assumed that we could work for 35 years and then retire for 30 more years. When it first started, the retirement age was 65 and life expectancy was less than that. Now that life expenctancy is over 70 years of age, we must raise the age when people get Social Security.
Adjust Medicare. The main reason we are having such budget issues is that we are an aging society. The baby boomers (and I am one of them) are getting older and their medical costs are increasing. The system has to change along with the demographics of the population.
Cut spending. Everyone has their own favorite programs that should not be cut. Maybe it would be a good idea to have a rational, non emotional discussion on what the proper role of government should be. When we agree about what government should do, we then will know what it costs.
These are just a few general thoughts. If you have read this far, you probably know that there is much more to be said, but I will stop now.
Anyone have any reactions?