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America Went Over the Fiscal Cliff Long Ago
Canada Free Press
Alan Caruba
12/2/2012
Excerpt:
I doubt that President Obama will compromise with the House Republicans on anything that might be done to avoid the January 2nd “fiscal cliff” that kicks in with higher taxes for everyone.
Obama has made it clear that increasing the tax rates on “millionaires” is his goal and he made that clear throughout the campaign. The income that would be generated from the increased rates would generate enough money to run the nation for about a week or so at most. In politics perception often trumps reality. And those “millionaires” are mostly middle class folks earning $250,000 or more.
As Chris Cox and Bill Archer, two veterans of the House, chairman of key committees, now in the private sector, wrote in a November 26 Wall Street Journal commentary, “The actual liabilities of the federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—already exceed $86 trillion, or 550% of GDP” (Gross Domestic Product, i.e., the total the U.S. earns from the sale of all goods and services annually).
We are so far passed the fiscal cliff that the U.S. is unlikely to be able to borrow its way out of this huge debt. Cox and Archer said that “Borrowing on this scale could collapse the capacity of global capital markets—and bankrupt not only the programs themselves but the entire federal government.”
“When the accrued expenses of the government’s entitlement programs are counted, it becomes clear that to collect enough tax revenue just to avoid going deeper in debt would require $8 trillion in tax collections annually.”
By adding $6 trillion in debt during his first term, it seems to me that Obama’s goal has been to bring the nation to financial ruin. He added more debt that all the combined presidents before him. He squandered billions on bailouts of General Motors and Chrysler, loans to “green” companies, and increases in programs like food stamps. He cut off new sources of income from the energy sector and, with them, the prospect of jobs that would be generated. At one point he advocated developing algae—pond scum—as a new source of energy.
The total amount of earnings from individuals and corporations is not sufficient to cover the debt and operating expenses of a federal government that has been steadily expanding since early in the last century. Cox and Archer noted that “all individuals filing tax returns in America and earning more than $66,193 per year have an adjusted gross income of $5.1 trillion. In 2006, when corporate taxable income peaked before the recession, all corporations in the U.S. had a total income for tax purposes of $1.6 trillion.”
That’s a total of $6.7 trillion available and we have more than $8 trillion per year in liabilities. The U.S. is borrowing $4 million a day to pay the interest owed on its debt and other liabilities.
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View the complete article at:
http://www.canadafreepress.com/index.php/article/51460
Canada Free Press
Alan Caruba
12/2/2012
Excerpt:
I doubt that President Obama will compromise with the House Republicans on anything that might be done to avoid the January 2nd “fiscal cliff” that kicks in with higher taxes for everyone.
Obama has made it clear that increasing the tax rates on “millionaires” is his goal and he made that clear throughout the campaign. The income that would be generated from the increased rates would generate enough money to run the nation for about a week or so at most. In politics perception often trumps reality. And those “millionaires” are mostly middle class folks earning $250,000 or more.
As Chris Cox and Bill Archer, two veterans of the House, chairman of key committees, now in the private sector, wrote in a November 26 Wall Street Journal commentary, “The actual liabilities of the federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—already exceed $86 trillion, or 550% of GDP” (Gross Domestic Product, i.e., the total the U.S. earns from the sale of all goods and services annually).
We are so far passed the fiscal cliff that the U.S. is unlikely to be able to borrow its way out of this huge debt. Cox and Archer said that “Borrowing on this scale could collapse the capacity of global capital markets—and bankrupt not only the programs themselves but the entire federal government.”
“When the accrued expenses of the government’s entitlement programs are counted, it becomes clear that to collect enough tax revenue just to avoid going deeper in debt would require $8 trillion in tax collections annually.”
By adding $6 trillion in debt during his first term, it seems to me that Obama’s goal has been to bring the nation to financial ruin. He added more debt that all the combined presidents before him. He squandered billions on bailouts of General Motors and Chrysler, loans to “green” companies, and increases in programs like food stamps. He cut off new sources of income from the energy sector and, with them, the prospect of jobs that would be generated. At one point he advocated developing algae—pond scum—as a new source of energy.
The total amount of earnings from individuals and corporations is not sufficient to cover the debt and operating expenses of a federal government that has been steadily expanding since early in the last century. Cox and Archer noted that “all individuals filing tax returns in America and earning more than $66,193 per year have an adjusted gross income of $5.1 trillion. In 2006, when corporate taxable income peaked before the recession, all corporations in the U.S. had a total income for tax purposes of $1.6 trillion.”
That’s a total of $6.7 trillion available and we have more than $8 trillion per year in liabilities. The U.S. is borrowing $4 million a day to pay the interest owed on its debt and other liabilities.
.................................................. .......
View the complete article at:
http://www.canadafreepress.com/index.php/article/51460