Guess What They Are Not Cutting In The Fiscal Cliff... | ZeroHedge

The fiscal cliff is just nonsense it is a distraction. But, the Democrats campaigned on class warfare where high earning people are to be coerced and forced into paying and even larger share of the nation tax obligation despite the fact that they already pay more than their fair share. This is the center piece of their whole economic policy. Juveniles are running the nation and i think that we should let them do it. Let the inmates have the keys to the asylum. Give them a chance to completely run the show and lets see if communism works, American style. It won't.

The fiscal cliff was created by the Whitehouse in order to scare people. However, reality is just not very pretty even assuming that taxes increase on high earning people. Even with a return to the pre-Bush tax rates, an addition $60 billion or so can be expected to be collected annually. This coupled with gigantic middle class tax increases under Obamacare, will have the effect of increasing potential revenue around $200 billion a year. But people will change behavior and the central government will never get everything that they are hoping for. Remember taxes or borrowing is economically exactly the same. It takes productive capital out of the hands of people that earned or saved it and allocates it to government spending. The only way that this makes sense is if one can empirically prove that this spending is more productive than what the private sector would have allocated it to. Common sense tells us that to think that government spending is more productive economically is delusional at best and destructive at worst.

I think that we are only a few short years away from a US government default on its obligations. consider this....

But here's the problem-- the US fiscal situation is so untenable that the government fails to collect enough tax revenue to cover mandatory spending and debt interest. In Fiscal Year 2011, for example, the US government spent $176 billion MORE on debt interest and mandatory spending than they generated in tax revenue.

In Fiscal Year 2012, which just ended 6 weeks ago, that shortfall increased to $251 billion. This means that they could cut the ENTIRE discretionary budget and still be in the hole by $251 billion.

Eventually, people are going to get tired financing a completely irresponsible government like we have seen going on in Europe. I think that people will starve to death in the united States like we saw in Russia and China during the Communist years. And this will be completely and totally the responsibility of the government in Washington.

Guess What They Are Not Cutting In The Fiscal Cliff... | ZeroHedge