There have been well in excess of fifty of these “end-of-the-world fiscal cliff events.” They are a recurring part of the playbook of the criminal establishment that we know as Washington. To define their charade as a crisis is to distort reality. These events are as predictable as the PBS “begathons” that recur regularly. According to one source, the debt ceiling limit was raised ninety times in the hundred years that represented last century. The absurdity of this event should be clearly apparent.
Most of the debt problems occurred recently. This chart shows the recent history of the debt ceiling:
In the two missing years since the chart was developed over two additional trillion dollars of debt has been added, getting us up to over $16 trillion and the current crisis.
Nothing that recurs again and again and again can be properly termed a crisis. That is especially true for something as simple as balancing a budget. Millions of Americans, many of them un- or under-educated, solve this problem annually. They require no training, even those who are considered Illiterate and/or innumerate. They manage their personal affairs prudently, actually genius-like when compared to the elected predators we call politicians.
The concept of spending only what you earn is not a difficult one. All individuals want more (our demand for goods is infinite), but individuals understand the consequences of living beyond their means, even when encouraged by the governmental-financial nexus to take on debt to do so.
Washington, however, is too stupid to be able to do what average Americans do regularly. Or they have an impossibly difficult job. Neither is true. What is and has happened is predictable. Caving in to their sob story once again will not solve anything. It only enables them to come back the next time for more.
The chart to the left shows what has happened recently. Spending is out of control, more so than ever before. This spending is doing nothing with respect to reviving the economy as can be seen by government receipts which are below where they were in 2007. Much spending was billed as “stimulus,” a government euphemism for justifying more boondoggles, vote-buying and paybacks to supporters.
The magnitude of spending is actually retarding the economy. Most businesses and individuals know that deficits represent future tax increases. The fear of these has caused economic actors to prepare for a dire future. Meaningful hiring or investment does not occur in such a climate. No one expands in the face of negative expectations.
The ultimate irony is that our elected officials are supposed to work for us. Yet, the system does not operate that way. Imagine hiring a landscaper or employee to work for you and then having that person able to raise his own wages whenever he “needed” money. Who is really in charge in such a situation?
Also imagine that you could not fire this parasite. That is effectively the position we are in with respect to government. Our “public servants” tell us what they want rather than us telling them what we will give them. Absurd, absolutely absurd, but that is exactly why we are in the economic crisis we are in. These “servants” are like the rest of us in the sense that their demand for goods and goodies is infinite. But they are unlike the rest of us in that they can coerce money from us whenever they please. They have few constraints short of a tax-payer rebellion.
The chart to the right is Barron’s attempt to estimate the increase in taxes that the latest fiscal-cliff crisis is attempting to grab. Their estimate is over one half a trillion dollars in higher taxes in 2013. It is doubtful they will get all of this. Even if they were successful, the behavioral adjustment by economic actors would lower these estimates. These adjustments would also likely plunge the country into a deeper recession than we are currently in.
Make no mistake about what is happening. This crisis is manufactured by prior imprudent political behavior. Any “solution” will only result in more imprudent spending, putting us back to this same position in a year or two. Providing these crooks with more money is akin to providing an addict with another fix. It is not a solution to the underlying problem. Both the addict and the country are made worse off by such action.
There is no amount of money that is enough for Washington. Whatever they receive, they will spend even more. Ultimately the country will crash and burn under this fiscal management.
Better that we say NO! now and let it happen right away. Oh, yeah, I forgot for a moment that we have no say in this charade. The Bloods and the Crips will decide how much more we “donate” to support their lifestyles and criminal activities.
What a country!
H/T to Ty Andros for two of the charts.