The Fiscal Cake!
The Fiscal Cake!
You heard me right and I am not misquoting the latest Washington buzzword “fiscal cliff”. I really do mean the fiscal cake.
You see, when I was just a lad my Mom would say to me “you can’t have your cake and eat it too”. I would say to myself (in those days saying it to her would have meant an unscheduled dental visit to fix a loose tooth or two, if you know what I mean!) So I would say to myself “what the heck is she talking about, these old people are losing it and fast!”
But now some 35 years or so later, I want to say to the American people, “don’t be fooled by the election rhetoric, you can’t have your cake and eat it too”. And just like I queried the sanity of my Mom, you are probably wondering “what the heck is this crazy guy talking about”.
Well here is the “rubber meets the road” fact about the American economy: You can’t reduce the deficit without raising taxes and/or major spending cuts. So when Romney says to you “we will cut the deficit and we will not increase taxes”, I say “you can’t have your cake and eat it too”.
And this brings me to the fiscal cliff. In 2013 the Bush tax cuts are set to expire and an automatic $1 trillion in spending cuts is set to kick in. So we are facing the possibility of higher taxes and less government services. Paying more for less. It is not a pretty picture.
Now if Congress comes up with a sensible debt reduction plan the higher taxes and trillion dollar spending cuts will not kick in. At least that’s the plan.
But here is a question for the “geniuses” who came up with that plan: “what other sensible way can Congress reduce the debt that does not require more revenue, i.e. taxes, and/or less spending, i.e. spending cuts? So in effect, the fiscal cliff can only be avoided by a fiscal cliff.
So America, the choice is clear: either we eat the cake and don’t have it or we don’t eat the cake and have it. Complicated? OK, well let me put it this way: If we want to cut the deficit and “balance” the budget we are going to need more revenue, which means higher taxes and/or cut spending which would mean less government services.
Or we can say “to heck with the deficit and balancing the budget” and we can keep taxes low and maintain a reasonably unchanged level of government services.
Any candidate, Obama or Romney, who tells you otherwise is trying to eat the fiscal cake and have it too.
And according to my Mom, you just can’t do that! I trust my Mom more than I trust Obama or Romney.
When it comes to common sense, cakes and fiscal responsibility, Who do you Trust?
Or these Moms?
According to the Congressional Budget Office, the fiscal cliff while reducing the deficit would create an economic slowdown by shrinking GDP by approximately 0.50% and increasing unemployment to 9%. This spells RECESSION.
My next blog we will look at whether there is another option that can avoid this fiscal cliff induced recession.
Congressional Budget Office budget and economic projections for 2012 through 2022.