What In The World Are Barack Obama And John Boehner Thinking?

by Michael, The Economic Collapse  |  published on December 19, 2012

Fiscal Cliff

Barack Obama and John Boehner both seem absolutely determined to drive U.S. government finances off a cliff. The mainstream media would have you believe that there are vast ideological differences between the two of them and that they are bitter enemies, but that is simply not the case. Both of them say that tax increases are “necessary”, but they disagree over the details. Both are seeking about a trillion dollars of spending cuts and about a trillion dollars of new “revenue”, but they don’t see eye to eye on how to get there. But overall, they are both definitely playing in the same ballpark. And those numbers certainly do sound impressive until you realize that they are talking about a time span of ten years.

Personally, I would love to see federal spending cut by a trillion dollars this year. But that will never happen. A trillion dollars over the course of a decade breaks down to about 100 billion dollars per year. That still sounds like a lot of money until you put it up next to the trillion dollar deficits that we have been running for four years in a row. Even if somehow those spending cuts turned out to be real (which they aren’t), they would still only put a very small dent in our yearly budget deficits.

Obama and Boehner both want to continue to have a gigantic federal government that showers people with government money, and both of them want to continue to pass much of the burden for paying for this gigantic government on to future generations. And both of them want to continue to steal more than 100 million dollars an hour from our children and our grandchildren in order to maintain the false bubble of debt-fueled prosperity that we are enjoying right now. This is incredibly foolish and they are leading us down a path that will lead to national ruin.

Sadly, even the pathetically small “budget cut” and “new revenue” figures that they are floating around turn out to be quite hollow when you inspect them more closely.

For example, the “new revenue” figures that both Obama and Boehner are talking about rely on extremely unrealistic assumptions about U.S. economic growth. In order to meet their revenue projections, the U.S. economy would need to grow significantly faster than it is right now and we would need to get through the entire decade without having a single recession.

What do you think the chance of that happening is?

But that is the way that things work in Washington D.C. – our politicians function in a world where it is assumed that everything will work out just perfectly in the future.

For example, if the figures put out at the beginning of the Bush administration were to be believed, we should be absolutely swimming in government surpluses by now.

That didn’t work out too well, did it?

The “spending cuts” are even more illusory.

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