SEARCH BLOG: ECONOMY.
Forbes has a good article summarizing the present state of negotiations on the fiscal cliff. Relative to the $16 trillion debt facing this country [and growing rapidly], the negotiations have resulted in appallingly little. A 3.6 percentage point bump [10% increase in the rates] in taxes on some high level incomes and the expiration of the Social Security tax reduction for all, provide very modest revenue increases for the government. Spending cuts are non-existent.
A few bad things have been temporarily avoided. Massive cuts in payments to doctors for Medicare services were avoided. Dairy prices won't go up [this just got tacked on]. But nothing in stone about actually cutting spending. There will be future talks which is Washington-speak for we're gonna ignore that.
The reality is that, aside from a tax increase on high income families, the cliff is getting higher every day and all the posturing is not addressing the very basic issues: our government is spending too much on new programs while unable to balance the budget. The heavy hand of government comes down only on business in the form of more and more regulations that stifle growth, but never comes down to close the government wallet to stifle spending.
Any agreement based on present negotiations is hardly better than nothing. The next crisis will, of course, be the debt ceiling. The dancing continues.
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