Tuesday, December 4, 2012

The Fiscal Cliff

Americans will blame Republicans if deal isn't reached.  This doesn't seem like too big of a threat to them, however, as the next election is two years away, and any ill will will be long gone by the time the next election comes around.

I hope Republicans ignore this and do the right thing.  Republicans need to force spending cuts now, as otherwise it will be almost impossible to do later.  I think this should also involve some modest tax increases, but the better way to raise tax revenue, in my opinion, would be to cut out loopholes and deductions and leave tax rates the same. (Or only increase them slightly.)

Pat Toomey has a great op ed on this issue.  Link here.

My favorite part is the quote of Obama and Toomey's agreement:

"... The vast majority of Democrats on Capitol Hill would prefer not to have to do anything on entitlements, would prefer, frankly, not to have to do anything on some of these debt and deficit problems. . . . And what I've tried to explain to them is, number one, if you look at the numbers, then Medicare, in particular, will run out of money, and we will not be able to sustain that program, no matter how much taxes go up. I mean, it's not an option for us to just sit by and do nothing."
- President Obama, July 11, 2011

I agree with President Obama. No matter how much we raise taxes, we cannot avoid a fiscal disaster unless we address the true drivers of our out-of-control deficits - namely, our entitlement programs. 

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