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News Link • Government Debt & Financing

What Fiscal Cliff?

• The Reverend, Beacon Journal

Is there a difference between falling off a cliff and walking down a hillside? Somebody needs to explain the difference to the Village media crows.....because they are nearing hysteria in their frenzy to scare us all over something not really scary. Seriously....there is no "fiscal cliff."....just as sure as there were no WMD's in Iraq.

What happens come January 1? The Bush-era tax cuts expire.....including income, capital gains and dividend tax rates. Obama's payroll tax rollback expires. Just as importantly, the terms of the notorious "sequester" kick in with these consequences for the military-industrial complex....

....the Congressional Budget Office projects that the Pentagon's base budget will fall to $491 billion in 2013, down from $554 billion in 2012. Thereafter, defense spending will grow with inflation. That would save roughly $500 billion over a decade.

If the Pentagon only has $491 billion in 2013 to work with instead of $554 billion.....would the military complex fall off a cliff over it? Villagers try to scare us by telling us it would leave our military a "hollow force." Does a budget of $491 billion PER YEAR sound "hollow" to you?

But even then, the $55 billion in cuts to defense spending don't happen all at once. Instead of the military complex having a little over $46 billion per month to spend starting January 1st, they'll only have $41 billion to spend every month. Not falling off a cliff.....just walking down a hill spending $5 billion less per month.


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