Sanity Zone 12-6-2012 Fear of Flying
Posted 12-07-2012 at 08:45 AM by xan
Updated 12-15-2012 at 01:30 PM by Halo (added to categories: Business, News, U.S. National, Politics)
Updated 12-15-2012 at 01:30 PM by Halo (added to categories: Business, News, U.S. National, Politics)
No, this is not a commentary on Erica Jong or 50 Shades of Grey. Brace yourselves: this is a commentary on the fiscal cliff. Such a surprise, right?
Anyway...I'll get to the point. Jump.
Take a running start and spread eagle into the "unknown." Our fiscal finances need to be drastically restructured (compared to now) and the only way to do it is to rip the bandaid off. So let's do it. Here's why:
#1 We have $16 Trillion in current debt and $70 Trillion in pending liabilities which require revenues to offset. Our current tax rates are inadequate (to say the least) to meet the expectations. Every American should be expected to kick in, not just the rich. It doesn't matter how poor or how little one expects to receive relative to the contributions made. Everyone needs to have skin in the game. Our current tax system exempts many people who could otherwise contribute to the benefits they expect to receive in the future. Even a small contribution will have a significant effect on the overall trajectory of the domestic balance of accounts.
#2 Returning to the Clinton era tax tables removes the confounding tax benefit of passive income rather than hard work wages. The Bush tax cuts especially favored gambling over hard work. The dramatic polarization of income and wealth since 2001 has been greatly enhanced by this policy shift. This policy has the double effect of reducing the risk taken by capital; without risk taking, job growth and investment in new technologies are stunted.
#3 Forced rationalization of the Military Budget. Even Republican strategists admit that there is fantastic waste in Defense spending. Ratcheting down the budget will force unproductive use of funds out. Keep in mind that Defense does nothing productive in the economy. It's output is purely psychological. The more we borrow to pay for "peace of mind" beyond what is necessary, the less we have for health, education, and research.
#4 Forced rationalization of Medicare. My biggest problem with the way Medicare is financed is that policy makers grossly underestimated the rate of technological change in medicine, allowing for more and increasingly sophisticated therapies and tests for an ever aging population. With a disincentive for preventive care, punishing doctors for participating in the program and the rampant fraud and abuse, there is so much wrong with the execution that the overall public benefit is diluted.
It's really hard to find more efficient ways of executing a plan. Our elected officials have succumbed to the payments of rent seekers staking out their unjustified claim to public moneys. At some point we have to be brave and separate ourselves from the destructive gravity that we created.
We have that opportunity and we should consider taking that leap.
Anyway...I'll get to the point. Jump.
Take a running start and spread eagle into the "unknown." Our fiscal finances need to be drastically restructured (compared to now) and the only way to do it is to rip the bandaid off. So let's do it. Here's why:
#1 We have $16 Trillion in current debt and $70 Trillion in pending liabilities which require revenues to offset. Our current tax rates are inadequate (to say the least) to meet the expectations. Every American should be expected to kick in, not just the rich. It doesn't matter how poor or how little one expects to receive relative to the contributions made. Everyone needs to have skin in the game. Our current tax system exempts many people who could otherwise contribute to the benefits they expect to receive in the future. Even a small contribution will have a significant effect on the overall trajectory of the domestic balance of accounts.
#2 Returning to the Clinton era tax tables removes the confounding tax benefit of passive income rather than hard work wages. The Bush tax cuts especially favored gambling over hard work. The dramatic polarization of income and wealth since 2001 has been greatly enhanced by this policy shift. This policy has the double effect of reducing the risk taken by capital; without risk taking, job growth and investment in new technologies are stunted.
#3 Forced rationalization of the Military Budget. Even Republican strategists admit that there is fantastic waste in Defense spending. Ratcheting down the budget will force unproductive use of funds out. Keep in mind that Defense does nothing productive in the economy. It's output is purely psychological. The more we borrow to pay for "peace of mind" beyond what is necessary, the less we have for health, education, and research.
#4 Forced rationalization of Medicare. My biggest problem with the way Medicare is financed is that policy makers grossly underestimated the rate of technological change in medicine, allowing for more and increasingly sophisticated therapies and tests for an ever aging population. With a disincentive for preventive care, punishing doctors for participating in the program and the rampant fraud and abuse, there is so much wrong with the execution that the overall public benefit is diluted.
It's really hard to find more efficient ways of executing a plan. Our elected officials have succumbed to the payments of rent seekers staking out their unjustified claim to public moneys. At some point we have to be brave and separate ourselves from the destructive gravity that we created.
We have that opportunity and we should consider taking that leap.
Total Comments 3
Comments
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Tell Obama your ideas. I don't know anyone personally who signed up for any of this government's ridiculous policies. How are we supposed to fix something we didn't create? To those who voted for these jack wagons we're dealing with, maybe they should take a look in the mirror.
I have a couple points here, though. You say we should rationalize military budget. Why? If anything, the military is underfunded. Did you notice how Obama APOLOGIZED to Libya after they attacked OUR consulate? He's more interested in making friends with the enemy, to uphold some false image of being a peace maker, instead of protecting us. He is placing zero emphasis on the things our tax dollars SHOULD be used for.
The other thing I'd like to point out is that you are wrong when you say every one should pay more taxes.
I believe that NO ONE should pay more taxes. Instead, bring the rates down, at the very least for the rich as most of them own businesses, so that they can afford to hire more people. I pointed this out in your last blog. You don't gain by raising taxes and sucking people dry, you gain by having MORE tax payers, and a steady flow of revenue. All this rhetoric solves nothing, and fails to pinpoint the real source of the problem. It's not nearly as complicated as you'd like to make it sound. Yet sadly nothing is being done and, consequently, what could have been a simple solution is becoming more and more impossible to fix.Posted 12-07-2012 at 09:57 PM by burningmetal
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Another nice post by Xan.Posted 12-09-2012 at 06:25 AM by jcp026
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The economic situation is sad in the U.S. The facts are the Bush tax cuts were measures taken to stimulate the economy briefly and not intended to be endless. It's not Bush's fault, nor is it Clinton's or Obama's. Our financial systems isn't broken - WE ARE BROKEN! The American financial institution as a whole has been unethical - period. There is NO ethics in private finances and banking - no vision of what could happen.
When things are good, markets run wild like a bull. The wealth and gains force persons and institutions to lends to anyone, like loan-sharks, and without forethought of anything.
When things are bad suddenly institutions are frugal, cutting back... it's a vicious bi-polar circle that we seem to fall into time and time again.
War - no one in this country has a real vested interest in it. I'm speaking from financial standpoint. When the US went to war in WWII, there was a tax imposed to everyone along with borrowing to pay for the war. Beyond that, people purchased war bonds. Citizens worked hard and spared things like oil or anything that could help produce products for the troops.
The past few wars we've engaged in the U.S., we just borrow money and watch the thing happen on CNN. No sparing, no sacrificing, no war tax, no war bonds. WE SUCK! This country IS NOT at war! We merely send our military to do our dirty work and borrow money from others to pay the dole.
We have to pay taxes. Tax code needs to be restructured. We need to pay war taxes if we need to go to war. Collectively as a country we need to learn to live within a National Budget. Whatever we do, we need to do it fast because we're falling from the top.
If we don't learn to manage our National finances quickly we won't die in a blaze of glory... it will be much worse - we'll be owned and controlled by Asiatic countries and our creditors who will dictate how and what we can spend our money on.... receivership will be a b1tch!Posted 12-15-2012 at 01:51 PM by Halo
Updated 12-15-2012 at 01:58 PM by Halo
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