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Politicians created the fiscal cliff to serve their own purposes

Published November 24. 2012 09:02AM

Everyone is talking about the looming fiscal cliff and how it is a major threat to the American economy. Let's get the facts straight! The politicians constructed the fiscal cliff as a face-saving measure because they could not balance the budget (Budget Control Act of 2011). They deferred the decision to increase taxes and cut spending to January 1, 2013 in the hopes that they could miraculously come together and find a method to refill the coffers after they squandered the money collected from the American people. With shouts of "tax the rich" reverberating off the Congressional walls, they're now trying to focus attention on the top one percent of the population who create jobs and away from themselves, the elected job destroyers of America.

In other countries, when the elected government cannot agree on a budget, the parliament is dissolved and there is a new election. With the threat of reelection over their heads, the politicians usually sit down and reach a compromise. Facing the electorate in a fiscal stalemate is unpalatable in countries such as Great Britain and Canada. Instead, they tend to balance the budget or run a slight deficit rather than upset the voters. In the 2012 Canadian budget, the government downsized the federal civil workforce by 4.8 percent. They managed to cut the budget deficit to approximately $20 billion. Our elected representatives in Washington added approximately one trillion dollars of debt in fiscal year 2012. We need to learn from our friends to the north so that we too can match our spending to our income. As it now stands, the massive deficit is an elephant standing on the shoulders of every man, woman and child in America.

The fiscal cliff will result in tax increases of 19.63 percent while cutting government spending by 0.25 percent. Tax increases in the 20 percent range will result in the loss of over one million jobs further crippling our fragile economy. What we need is a tax reduction so that people will have more money to spend. This will stimulate the economy and create many more jobs. Putting people back to work will increase tax collections and decrease unemployment insurance payouts. We also need to cut government spending by 10 to 20 percent instead of the piddly .025 percent. Our nation is living beyond its means and we must learn to cut federal spending until the budget is balanced.

During the recession, corporate America had to address their financial realities. Corporations trimmed fat and some even trimmed bone to stay afloat. Meanwhile our government continued to frivolously outspend their revenue stream. The federal government continued to grow in spite of lower tax revenues and a crippling recession. Now it is time to pay the piper! Congress needs to dramatically increase taxes or they have to slash government jobs. The elections are over! It is time for Congress and the president to work together on an austerity budget that matches expenditures to revenues.

This would also be a good time to overhaul the federal tax code. The tax code needs to be rationalized and simplified. Over the past few years, several politicians pushed a flat tax that eliminated loopholes. The tax form would be less than a page long. Simply list your income on the form. Then multiple income by the tax rate and voila! Your tax return is done. No complex tax deductions! We would not need office towers full of accountants to complete a tax return. With a determined effort, I'm sure we could consolidate income taxes, payroll deductions, unemployment insurance and other workplace taxes. We could also eliminate estate taxes and import duties.

As for cutting spending, we should start with military and foreign aid. Without the weapons and funding we provide to Israel and Egypt, it would be much more difficult for them to attack each other. Yes, one might overpower the other as a result of these budget cuts. But it is not our job to be the policeman of the world. Israel can fight her own battles. They have proven it many times since their country was reestablished in 1948. Egypt would not be able to mount an attack without American or Russian aid. So let's stop funding their military which may force them into peace talks.

Many countries rely on our foreign aid so that their dictators can line their pockets and fill their Swiss bank accounts with billions of our dollars. Foreign aid seldom gets to the people who need it most. It is siphoned away by corrupt politicians and civil servants. We can also close our overseas military bases and bring our troops home. We should not waste our blood and treasure protecting corrupt governments. Without our aid, some governments will fall. Others will be overthrown by the people. So be it! That's what our American Revolution was all about. We overthrew a corrupt monarchy and installed a government of the people, by the people and for the people. Our government has lasted over 200 years and I pray it will continue for many more centuries.

Next we need to address unemployment insurance and welfare costs. Unemployment insurance was originally intended to provide partial income replacement for workers between positions for up to 13 weeks. In certain circumstances, people can now stay on unemployment insurance for up to 79 weeks. I believe that retraining workers to provide them with the skills needed to find employment makes sense. But I cannot agree to fund a year and a half long sabbatical at taxpayer expense. Let's put the emphasis on getting the unemployed back to work even if it means revoking their benefits after 13 weeks.

As for welfare, we should provide temporary emergency funding for those families in financial distress. We should also provide shelters for the homeless along with a helping hand.

As soon as we suggest cutting back on welfare, the media floods the airwaves with stories of hardship. They will show a single parent attempting to support six or even eight children. It should not be up to us to sustain their families. The man who fathered the children should be required to support them. We should enforce child support legislation and send deadbeat fathers to jail when they fail to pay their court mandated child support.

We can no longer differ the economic problems facing our nation. It is time to make the difficult choices required to ensure that our country and our people survive the economic downturn. Politicians using the fear of a financial Armageddon should be voted out of office. Our elected representatives need to stand up and face the financial difficulties, develop a plan for fiscal responsibility, and then implement it. This is not a time for political speeches. It is time for action. We have a long journey ahead of us but we can do it. Nothing can hold the American people down for long! Americans are used to facing our nation's problems and to finding solutions. Instead of bitching about the fiscal cliff let's talk about the wonderful future for this nation and our people.

© 2012 Gordon Smith - All Rights Reserved

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