The Democrats want to talk about two things and two things only, raising taxes and spending more money. They want to raise taxes on the most productive in our society who already pay the vast majority of the taxes, and they want to raise the debt ceiling and spend more on "stimulus". The Democrats will not talk about cuts to programs, reform of the entitlements, or overall tax reform. The song never changes for them. The deficit was $1.087 trillion last FY ending October 2012, and you think raising taxes on 2% is going to lower it without reducing expenses materially? We collect about 60% of what we spend!!!!! In other words, you'd have to raise all taxes by 66% across-the-board, without losing anyone or any economic activity, to cover the deficit. You see, we don't have a revenue problem, but spending problem. We not only need to cut spending in absolute terms, we need to raise revenue (VAT or otherwise) and reduce future increases from the reduced levels. We're not talking a reduction in the rate of growth.
So now that Republicans have conceptually agreed to raise taxes, er..., revenue, as part of an agreement to avoid the looming fiscal cliff, liberals appear to have decided that there really isn’t a need or rush to cut spending after all.“Suddenly the clear and present danger to the American economy isn’t that we’ll fail to reduce the deficit enough; it is, instead, that we’ll reduce the deficit too much,” warns Paul Krugman. All this worry about debt and deficits is “an entirely contrived crisis,” writes Robert Kuttner in the Huffington Post. After all, as the New York Times explains, “deficits are actually a good thing when the economy is deeply depressed, so deficit reduction should wait until the economy is stronger.” “So,” sums up Robert Reich, “can we please stop obsessing about future budget deficits? They’re distracting our attention from what we should be obsessing about — jobs and growth.”
I say, let's go over the cliff. There is nothing substantial, whether in the press, written, or otherwise, scored by the CBO, from any democrat, let alone a single budget in 4 years. Let's go over the cliff. The democrats will blame the republicans, and the legacy of the President will be 9% unemployment. Not only does he want to spend more, he offers no cuts. We'll do those later.... Yeah, right. What a joke. Seriously, let's go over the cliff. Enough of this nonsense. Screw raising the debt ceiling too while we're at it. Democrats voted for him, and they own the legacy now. We'll see who is going to be hurting more at the end of the day. The legacy will be 9% unemployment for the President and the republicans will get tarred in the press. Fantastic! But enough is enough of this BS. It is time to eat your peas boys and girls and the medicine is bitter. Everyone pays as much. This was meant to sunset, so let it. At least we have a put in place a mechanism to force the cuts.
Oh, and while on my soap box, let me extend a debt of gratitude to the left leaning democrats who took over Congress on January 3rd, 2007. The last republican budget passed was in 2006 for 2007, and the 2007 budget was not passed but put through in a continuing resolution motion by Nana Nancy as the "messiah" was on his way into office. Barney F. (with the purple dinosaur) and Chris D. (who never got a favorable mortgage) were chairing the Finance and Banking Committees for 16 months before the proverbial excrement hit the fan, all the while pushing homes for everyone at the expense of Freddie and Fannie. GWB tried to stop this nonsense 17 times in 8 years. This is a scary proposition but no, it is all his fault. He and the republicans did approve 2 wars and medicare increases without offsets, and that is his fault, but that is nowhere near to the expenses that we are incurring today or will tomorrow.
Either way this ends up people are going to have less money next year and I think we have a recession. If so, then oil stocks may be capped or range bound. Natural gas should have a bid under it, but it should not go off to the races either. That is my best guess.
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