Let me say this first off. The Federal government doesn’t need more money. In fact, I will say it has been such a poor steward of the money it has taken that it doesn’t deserve to get more money. What we have from this government and current administration is a spending problem. As Ron Hart at Reason Magazine said, “Democrats, who believe we have a revenue problem instead of a spending problem, must also think they have a bartender problem and not a drinking problem.”
If we were to believe everything the mainstream media is saying about our fiscal cliff, you would think the world wasn’t going to end on Dec 21st but on January 1st when ‘draconian’ cuts in spending take place. The solutions have been limited, but the fear has been widespread by those in Washington. Some say Obama is going to drive us over this metaphorical cliff, others say the Republicans lack of compromise on taxes will take us over the cliff. The Libertarians, along with most Independent voters, say that we are not being driven over any cliff but instead being pushed off the by both Democrats and Republicans. To say we are being driven over would be to assume that anyone who holds a national office would be remotely affected by spending cuts or tax raises. The only thing we have to be truly worried about is if a compromise is reached, because it will mean that politics as usual gets to continue.
In order to have an honest discussion about what needs to get done and cut through everything being said, I’m reminded of a quote from Tibetan Buddhist Pema Chodron. “A further sign of health is that we don’t become undone by fear and trembling, but we take it as a message that it’s time to stop struggling and look directly at what is threatening us.”
What is threatening us is a wakeup call that the last few decades of policy are no longer effective and that we all must make further sacrifices. Those of us in the Libertarian Party have been saying both under Bush and Obama that our debt and deficits were a huge deal. But neither side wanted to listen as long as their guys were the ones running the show. So now we are here and people are scrambling, and this Libertarian says we should take our lumps and head over that cliff. The sooner we go over, the quicker we can realize that the current progressive left creates plans that do not work, and the old guard in the Republican party still clings to plans that don’t work. What will work is a free market and a reset on our current fiscal and monetary policy.
The idea that these two sides will compromise and find something that will benefit us is laughable. We are facing, according to the White House’s own numbers, an increase in spending and taxes. While by 2015 we will be looking at taking our annual deficit down from a current 1.3 trillion dollars to 610 billion, our spending will still outpace inflation coming in at over 4 trillion dollars. We will be averaging an incredible 22.5% of GDP in spending over the next decade. Our debt will increase anywhere from 5-8 trillion depending on which projection you look at, and the only solution is to say we increase taxes on the top 2% of earners from 36% to 39.6%. The reason that we had a budget surplus under Clinton is we didn’t increase spending beyond inflation, unlike what we are doing now.
Here’s the thing, it has been said over and over that we can’t tax ourselves into prosperity. What we are also facing is a tax increase on dividends and capital gains from 15% to 20% as well as a dramatic estate tax increase. Currently we are paying 35% estate tax on estates over five million dollars, but the new increase would see us paying 55% on all estates over one million. How many times does the same dollar need to be taxed?
Obama wants to cut out loopholes and tax deductions for those making a lot of money and those in the financial sector, but not touch other loopholes. This is only a half hearted attempt. You want real progress then cut ALL loopholes and tax deductions. Institute a fair or flat tax, do away with the Federal Reserve and return the money printing powers to the US Treasury, and do away with the income tax. Investors were on the sidelines before the election and were worried about Obama’s policies being continued. All investors were worried, not just the ‘super rich’ who seem to be vilified.
That’s the other thing. WE need to drop the fear being propagated about the rich not paying their fair share. George Soros and Rupert Murdoch, Warren Buffett and Donald Trump, they all have the ability to pay their ‘fair share’. If they want to pay more, they can. Why do we say the rich are so evil, yet celebrate a certain few in liberal circles?If money is so evil, shouldn’t all billionaires be reprehensible? If money is so evil, why do so many of us buy Powerball tickets last week in hopes of winning half a billion dollars? Money is a tool and it is all in how you use it. And if you work hard and are successful, you should not be lionized, nor should your family have to pay more in taxes for your successes.
So we’ve talked about not bringing in more money and spending within our means. We do that by saving $800 billion from the end of Afghanistan and Iraq wars by 2014. Although will we just find a new place to intervene such as Syria or Iran? We need to cut military spending by 50%, close most of the bases, bring the troops home. Maintain relationships with allies, but we must step back. We must instead focus on some military spending with improving conditions for our troops, focusing on mental health and job placement for veterans. If you take the top ten countries in military spending, the US outspends the next nine by almost three fold. We spend over 700 billion dollars compared to China, at number two, which spends almost 90 billion.
Why are we even spending this much? What should the government’s role truly be? No one seems to be saying “Why did we do this to begin with, and why are we still doing this? Shouldn’t we focus more on the basics and what the Constitution lays out?” If not, then our Constitution is completely worthless and this country is moving in a direction I no longer want it to. A Constitutional Amendment for a balanced budget won’t do anything. If our current administration is already proving they don’t agree with most of the Bill of Rights and wanting to make the Constitution obsolete, what makes any of us think adding another amendment will cause them to change their course?
Increasing tax rates by 3.6% on the highest incomes to 1998 levels won’t solve the problem. Even if we increase the top tax rate to 94% as it was in 1945 that still wouldn’t help our cause. What would be nice is to see if we can’t get a flat tax is to return to tax rates from 1913-1917 where the highest rate was 7%. It is a spending problem, plain and simple. There need to be drastic cuts. There needs to be more of a focus on personal responsibility. Whatever happens, those of us that prepare will get through this financial crisis just as we got through the last one.