Title: The "Fiscal Cliff" is the SOLUTION, and NOT the Problem.
Author: Andrew M Molchan
Date: Wed November 14th, 2012
Nov 14th 2012. ANDY'S UNPOPULAR INSIGHTS. The so-called "Fiscal Cliff" is the Needed Solution, and NOT the Problem.
Today's Wall Street Journal Headline article says, "President Barack Obama will...call for $1.6 Trillion in additional tax revenue over the next decade."
If you can do 4th Grade Math, you know that "over the next decade" the USA will need $6 Trillion in additional tax revenue, and another $6 Trillion in CUTS to Current Expenses and so-call "entitlements."
Mr. Obama's additional $1.6 Trillion over 10 years isn't going to do shit. It's a JOKE. It's PETENDING to do something while in reality kicking the can down the road.
It's like a business that's running at a $1,000 a day LOSS. The con men: Obama, Geithner, McConnell and Boehner get together and "agree" on ways to Raise the company's revenue by $200 a day. Then they issue this statement to the company's stock and bond holders, and the WSJ, "Through hard negotiations we have totally SOLVED the company's economic problems. Everything is wonderful. Every financial aspect of the company is now brass bound and rock based forever and ever. We all look forward to sunny days and growing profits for the next 1000 years." Sure.
Based on the really "good news" above, the stock market goes up.
The Math is 4th Grade: America has to RAISE Income by $600 Billion Dollars Per Year, and CUT expenses by $600 Billion Dollars Per Year for as many years into the future as I can see.
By my analysis, the above $600 Billion numbers might have to go UP after a few years.
For CUTTING expenses, my suggestion is to Cut the Defense Budget by $250 Billion a year. The Pentagon does NOT need $650 Billion a year to LOSE WARS. The Pentagon's Generals can lose the same wars with $400 Billion a year as they've been losing for the last Half Century with $650 Billion a year.
America's ONLY long term possible enemy is China, and China's military budget is $100 Billion a year. So even at a reduced $400 Billion a year America's military budget would still be 300% BIGGER per year than China's.
For RAISING MONEY, I'd put a sales tax on the sale of stocks. Let's be honest, 85% of Wall Street is de facto Casino Gambling disguised as investment. Every day there are tens of thousands of GAMBLERS in front of their computer screens buying and selling the SAME STOCK five times A DAY. This is the ONLY "work" they do, and the ONLY thing that concerns them is WHERE the price of the stock will be 10 minutes from now. It's Gambling, and there's nothing wrong with TAXING gambling. This would bring in $200 Billion dollars a year in BRAND NEW Revenue.
All of the idiots on TV are screaming about the "Fiscal Cliff." I see the so called "Fiscal Cliff" (and there is no cliff) as a BIG part of the Must Have SOLUTION, and NOT the Problem.
Raising Revenue and Cutting Expenses is what American Needs. Right? There is no magic Bernanke Tooth Fairy that's going to queer-money REDUCE the Federal Debt by Borrowing a lot MORE Money over the next ten years.
To NOT have a financial collapse in five years, America Must Raise Revenue, and Must Cut Expenses NOW. That's exactly what the so-called Fiscal Cliff does, and it Starts doing It NOW.
If we cut the Defense budget by $250 Billion, and let the Fiscal Cliff happen LIKE WE SHOULD; then All of the Federal Budgets automatically Cut by 10% (i.e. Fair and Equal). That's $360 Billion in Federal Cuts NOW. Plus the $250 Billion from Defense Savings. We ACHIEVE over Half of the $1.2 Trillion needed. Add in $200 Billion for the Wall Street Gambling tax, and we are at $810 Billion PER YEAR. That leaves less than $400 Billion to totally close the Budget Gap and have a Balanced Budget, and NO growth of Debt.
TIMING: The TV Karmer Clown morons are all screaming, "The Cliff has to be postponed now, Now! NOW!!!"
The Income YOU make in January of 2013, YOUR income tax return on that money DOES NOT HAVE to be filed until October of 2014 - 21 months LATER. There is NO "Cliff."
The New Congress that was Elected (in this election) is the body that should be doing the work. America is supposed to be a LONG TERM PROJECT - Right? Nothing HAS to be done in the next 30 days.
The "Fiscal Cliff" is a Big part of the SOLUTION, and Not the Problem. How many MONTHS of Congressional screaming would it take to get a simple 10% across the board CUT in Federal Spending? A year? Two years? Never? All Mr. Obama has to do is NOTHING and it happens NOW. The "Fiscal Cliff" is a Once in a Lifetime Opportunity to do the right thing. It's an opportunity to STOP kicking the can down the road. It's an opportunity for much needed, bold, leadership.
If Not now, then When?
PS. The Germans and Japanese are NOT a stupid people. In 1944 Both the German and Japanese People where 100% sure that surrender was the Problem, and not the Solution. Letting the Fiscal Cliff WORK is the Solution.