I am absolutely amazed that nobody has put any of the proposed “fiscal cliff” spending reductions in the context of a simple percentage.
We somehow get lost in the diatribe about the defense industry being devastated, how it will take years to receive a hip replacement, and that poor grandma may be forced to eat dog food. The fools of both political parties just can’t stop spending, which apparently is the only way to be elected in this socialist driven country.
The Budget Control Act of 2011, which is the driving force for the “fiscal cliff,” says that $1.2 trillion in specified cuts must be made over the next ten years.
Not, I repeat, not all the cuts must be made in 2013.
Therefore, our so-called leaders are forced to shave approximately $110 billion from the current budget, both defense and non-defense, over the next 12 months.
Here’s where it gets interesting.
Using President Obama’s budget for fiscal year (FY) 2013, the spending assumption was $3.8 trillion.
Simple math would tell you that the cuts amount to less than 3% of the total declared budget. This does not include any of the off-balance-sheet financing, like Social Security, Medicare, Medicaid, Fannie, and Freddie, etc.
If you included these in the equation, the required cuts would be closer to 1%.
If you factor against the built-in increases predicated on a so-called growing economy, the cuts would be well below 1%.
Each and every day, American families are faced with harsh budgetary choices. Because of raging unemployment, the housing sector debacle, and a myriad amount of other uncertainties, the general public does not have the luxury of approaching their boss and simply demanding more money.
Therefore, daily decisions are made about maintaining a certain standard of living. If you ask any of these families if they could reduce their expenses by 3%, they would more than likely laugh and say “is that all, just cut across the board.”
Senator Patty Murray (D - Wash.) and Representative Jeb Hensarling (R-TX.) co-chaired a committee under the Budget Control Act of 2011. With astonishing ineffectiveness, Murray, Hensarling, and their committee members could not find a way to cut less than 3% out of the budget.
Instead, they all idiotically focused on taxes and they still do.
For that level of inability, both Murray and Hensarling should either resign or be expelled immediately.
Along with his 40-years of dedication in the financial services industry, Bill is the President and CEO of GPSforLife, has recently authored a highly successful book entitled 44th: A Presidential Conspiracy, publishes his dynamic monthly financial newsletter MacroProfit, and faithfully continues his third decade on the radio with It’s All About Money, which can be heard weekdays on Money Radio in Phoenix and in podcast form on his website (and on smartphone apps) published at billtatro.com weekdays at 5pm Eastern. Bill can be reached via email at firstname.lastname@example.org and on Twitter @tatroshow.