The Fiscal Cliff

UnknownIf you live in the United States or you work in any of the world’s financial markets your news has been full of “information” about the so-called fiscal cliff.

I’ll trust that if you have any interest at all in this post that you already know what the “cliff” is all about and the possible consequences of not avoiding it. I won’t bore anyone with more details.

I won’t even bore you with details on how to avoid it. There are after all only 5 or 6 options for settling the matter and sooner or later one or more of those options will settle it. Period!

This post is about the incompetence of the people that United States citizens “hired” to work out a compromise. I say “hired” because when we elect people and send them to Washington we do it with the understanding that they will “work” for the people that sent them there.

At least that’s how the voters see it. Apparently those we send don’t see it that way at all.

President Obama and Speaker Boehner are too busy worrying about personal “victories” to actually behave like adults and get down to business.

So feel free to listen in as I write what I’d say to these two gentlemen if I ever had the chance.

Mr. Speaker, did you happen to notice that your side mostly LOST in the November elections. Much to my personal dismay, the majority of the American people that you “work” for feel that raising taxes on the wealthiest Americans is the way to go. So quit your posturing and agree to raise taxes immediately. Get whatever compromise you can get on closing loopholes and work your butt off to fix the entitled mess that has been created over the last several decades. Please also remember as you talk with our friends from the Democratic party that while you are a Republican, you don’t “work” for Republican Americans, you “work” for all Americans. As a leader you must know that your impressive title doesn’t mean that your idea is always the best. Truly listen to the other side, there are plenty of very smart people over there as well. They care for the country too and the people who elected you expect you to work with them, not against them.

Mr. Speaker, we are sadly, way too far in debt to EVER get out of it without raising taxes. What most people don’t understand is that we could cut discretionary spending to zero, close every tax loophole and still not get out of debt in our lifetimes. Because of past mistakes (made by both parties) we simply must have more revenue than just closing loopholes can get us. Grow up Mr. Speaker and work withPresident Obama. Like it or not, the people you work for elected him President again. That ought to tell you something.

Now, Mr. President, I’m sure you’re feeling pretty good about the results of the election. Nice victory! I’d like to point out that it wasn’t exactly a landslide but hey, a win is a win.

I hope you are a gracious victor because at the moment, at least if the news reports are to be believed, you don’t seem to be. Let me encourage you to savor your victory with the sweet spices of small wins in the budget battles. Why choke by trying to eat the whole apple at once when by taking small bites you can enjoy it for years? (at least four)

The Republicans are caving on their “no tax” pledge like a bunch of cheap tents. Seize this moment Mr. President to achieve the “balanced” approach that you campaigned on.  Raise the taxes on the wealthiest Americans AND cut spending NOW. Your new plan to raise revenue today and cut spending later is not realistic. Ask anyone one that has ever re-financed their debt to lower their payments. Once they can again “afford” to spend the pressure to not spend quickly evaporates.

Mr. President, the “victory” of tax increases today, just for the purpose of increased spending will surely lead to a worse problem tomorrow. 240 years of American history proves that to be true. You will not find a single economist, Democrat or Republican who believes these deficits are sustainable. The sooner you get to work on reducing them, the better it will be for everyone.

Mr. President, you stand not only on the edge of the fiscal cliff, you stand at the edge of American history. You have the opportunity to do something truly great, life changing, and long-lasting for the American people. You stand as well on the blueprint of your legacy. You are one of life’s fortunate few who are allowed to draw it for themselves.

Raising revenue without cutting spending at the same time is like drawing the blueprint of your legacy in pencil. You still won’t know for sure what the future will do to your efforts.

Combining increased revenue with budget cuts, including long-term entitlement fixes is like drawing your legacy in ink. You’re assured of long-term impact and likely, a positive impact at that.

You mentioned during the campaign that you would be President for all Americans. I’d ask you to remember that pledge as you sit down with Speaker Boehner. The people who elected you are not interested in another win for the Democrats, rather they need a win for the American people.

You’re a smart guy, you have smart people working for you. Use ALL the brains around you to solve this issue. Please don’t solve it just to avoid a fiscal cliff, solve it because it’s the right thing to do for the long-term.

Mr. President, you have a 30 day window in which you can shape this nation for decades. The pressure of the fiscal cliff gives you, and Speaker Boehner that opportunity.

Now, to both of you together, if you guys screw this up you’ll have no one to blame but yourselves. I hope, and the American people expect, that as leaders you’ll step up to the challenge and “work” together this get this done.

If you two aren’t talking to each other, then as far as the American people are concerned, you aren’t talking at all. The campaign is over, the American people have spoken. The time for work is now!

Did Mitt Pay His Taxes?

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There has been much bloviating this election season about poor Mitt Romney’s tax returns. (you don’t see poor and Mitt Romney in the same sentence too often) I don’t blame him for not wanting to share his tax returns with the public, I mean, who would. However, nobody made Mitt run for President of The United States and he ought to just put up so his opponents will shut up. When you run for that office people just want to know… they have a right to know too.

Harry Reid, the US Senate Majority Leader has flatly stated that Mitt has not been paying taxes for at least some of the last ten years. Never mind that good old Harry doesn’t have a shred of proof, the media will make it front page news and he knows it. Mission Accomplished!

Mitt and his backers say of course he has paid his taxes, every cent that was legally owed.

Here is the beauty of the United States tax system: they could both be telling the truth! It kind of depends on what you mean by taxes. Mitt, like every American pays plenty of taxes, he may not however owe income taxes each year, just like many, many Americans. I don’t personally know a single person that would willingly pay more than they had to so if Mitt found a loophole, good for him.

I pay a lot of taxes, every year, income taxes, property taxes, sales taxes and taxes I likely don’t even know about. Just like most Americans. To me, the mere fact that it could be true that a person of Mitt Romney’s wealth might not legally owe income taxes is a big problem. Whether Mitt owed and payed his taxes is not the point, the point is, he SHOULD owe taxes.

I wish Harry Reid and his fellow “leaders” in Congress would quit the screwing around, quit trying to mislead the American people, quit trying to cover their own rear ends and just fix the tax code.

You’ll notice that Harry isn’t saying that Mitt broke the law, he didn’t say Mitt owes back taxes. THAT is the problem Senator! If anyone that earns that kind of money even has a chance at paying no income taxes then Harry and the entire Congress, along with every President the last 100 years or so, ought to be ashamed of themselves.

A flat tax, a consumption tax, a national sales tax, almost anything would be better than the crummy system we have today. If Congress fixes the tax system then most of their petty bickering would be unnecessary – they might even get some work done like the rest of us.