Dakota Beacon

The new media is all atwitter about the “fiscal cliff.” Only now, after the elections, is the media fixated on the fiscal cliff -- a day late and a dollar short.

America will not escape the fiscal cliff. We approach this calamity after decades of politicians pandering to voters and voters taking the bait hook, line and sinker. Like many disasters (famine, plague, disease) the fiscal cliff is manmade and could have been avoided. There will be repercussions and people will suffer.

One big Democrat supporter and AFL-CIO boss, Donald Trumpka, says there is no fiscal cliff. On November 15 in remarks to the National Mediation Board Conference in Washington he said, “What we’re facing is an obstacle course within a manufactured crisis that was hastily thrown together in response to inflated  rhetoric about our federal deficit.”

If Obama supporters see no fiscal cliff, then what’s the problem? Bring it on. Experience is the best teacher. Obama’s starry-eyed idealists deserve a healthy dose of reality. Let the chips (or economy) fall where they may. Too bad the rest of us must suffer.

Today’s actions by congress is mere political tinkering. The whole structure is artificially contrived by self-absorbed sycophants focused on buying votes for the next election by doling out goodies. Does anyone really believe that the politicians who got us into this mess by pandering for votes over the years will get us out of it in five weeks?

Here is what the “fiscal cliff” looks like. It is a congressional “fix” to a combination of government spending cuts and higher taxes. Whether or not congress arrives at this “fix” in the end is irrelevant. It is the national debt they won’t fix. More on that in a moment.

True to form, congress will most likely cave in and repeal any spending cuts now in place for 2013. For them, that’s easy because only a small portion of the spending cuts occur in 2013. If they cannot keep spending cut promises for one year, how will they keep them for ten? Thus, the debt will continue to increase as spending increases.

Then come the tax increases, a terrible combination of expiring pro-growth tax policies, the end of temporary payroll tax cuts and a few of Obamacare’s 18 new tax hikes. Combined, this is called “taxmageddon” and is the second piece of the equation.

How big is it? The tax burden comes to around $500 billion, give or take a few million. The Heritage Foundation broke down the expected tax increases by category per person for just 2013 alone. They increase over the years.

--  Families with an average income of $76,662: tax increase of $4,138.

--  Baby boomers with an average income of $95,099: tax increase of $4,223.

--  Low-income workers with an average income of $24,757: tax increase of $1,207.

--  Millennials with an average income of $23,917: tax increase of $1,099.

--  Retirees with an average income of $42,553: tax increase of $857.

Tax hikes will hit small businesses very hard, the ones that create the most jobs employing more than half the private work force. Their tax increases will destroy more than 700,000 jobs. Taxing the wealthy is no fix. It is an old class warfare illusion and ruse and will not put a dent in the national debt.

The biggest danger, and one that is not talked about, is the national debt and the ballooning interest rates. America currently owes $16 trillion. This does not include unfunded liabilities which make the debt much, much higher. So far, we can service this debt because of low interest rates (about 2% or about $300 billion a year). In a few years the debt will reach $20 trillion. As we continue printing money and our creditors demand higher interest payments the interest rates will increase to around 5% or more and the annual interest payment will run around $1 trillion a year. Eventual insolvency is the real fiscal cliff.

Still, the voters keep re-electing the same politicians.

If the Republicans oppose tax increases, the media will naturally pounce on them as recalcitrant obstructionists. They will use Republicans as human shields covering for totalitarian Democrats. In a government of checks and balances, the only check at this point is the Republican controlled House of Representatives. Otherwise, there would be no check and no balance to the tax and spend Democrats. The Democrats would just as soon kick the can over the cliff.

If the media runs a successful defense of the Democrat juggernaut and the Democrats take back the House in 2014, America will succumb to one party rule for many years to come. Among the electorate, the “takers” now outnumber the “makers.”

Our political class cannot bring itself to avoid the fiscal cliff. It is too late. Let nature’s harsh lessons begin.

Dennis M. Patrick can be contacted at P. O. Box 337, Stanley, ND 58784 or (JavaScript must be enabled to view this email address).