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Fiscal Ditch2Click on Image to See Larger Version

In the opening salvo of world WW II the German Blitzkrieg of Poland was met by the brave people of that country with whatever they had. There was never any doubt as to what the outcome of the conflict would be, the badly outgunned Poles often were relegated to fighting machine guns with pitchforks. Their efforts, although gallant, were not to unlike trying to stop a heard of rampaging elephants with fly swatters. Such is the defense the United States President and congress are waging against the financial blitzkrieg facing it. Of course, unlike the Poles, the politicians have the weapons needed to fight back and to keep the government from being overrun; it is only the will to use them that is missing.

From the left all that is heard is tax the rich, as though that alone would solve the problems. The reality is the taxes they plan on pilfering from the so called rich will optimistically pay for less than 3 percent of federal spending. Unfortunately it will also likely cost hundreds of thousands of jobs. It would seem that they are more intent on wealth redistribution than fixing the governments flood of red ink. Nothing more that a group of would be Robin Hoods looking to dish out what they see as justice. Maybe the President and Democrats should be reminded that the real story of Robin Hood was one of a man fighting against a bloated government and on the side of the overtaxed!

On the other hand the Republicans for all their bloviating have to know in their heart of hearts the tax base must be increased. Part of the problem is almost half the nation pays no federal income tax. Unless more people are required to pay their own way the fiscal situation is going to be mighty hard to solve. Of course increasing taxes on those now getting a free ride is politically unpalatable. This is especially true for a party that has no leadership that is either able or willing to convince the American people to go along. Of course that leads to the real heart of the situation, the deficit.

What is missing in the conversation is the sixteen trillion dollar elephant at the center of it all. The biggest obstacle the U.S. faces is not the so called fiscal cliff, its the debt wall just beyond it. The fiscal “ditch” will be damaging but not nearly as much as the financial and governmental collapse that will happen when the U.S. can no longer borrow. That day of reckoning is coming and by most experts calculations sooner than later. Before Obama leaves office the possibility of the U.S. government facing financial collapse is very real. Even now the credit agencies are looking to downgrade the U.S. credit to unfathomable lows if real and substantial cuts are not made. Cuts that the current president and his Democratic colleagues seem bent on preventing.

To truth is to avert hitting the debt wall the U.S. needs to implement substantial spending reform, tax reform and most of all entitlement reform. Unfortunately only the Tea Party caucus is worried enough to try to stop mad rush towards destruction. Something that has earned them wrath form Democrats and Republicans. What they realize and the faithful of the two parties do not is that jumping the ditch will only mean the U.S. will hit the wall sooner, faster and harder.

When the day of reckoning happens all Americans are going to be hurt but it is going to be the poor that suffer most. Something former Senator Simpson from the Simpson-Bowles commission tried to emphasis on CBS’s Face the Nation. In an all to common twist of fate, it will be those that claim to be the saviors of the poor that in the end will seal their torment.

For Obama increasing the tax base, setting the government on a sound financial footing and even economic recovery is not as important as creating a more “fair” world. Something the President outlined in one of his early debates.

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It is unfortunate that in times such as this that Presidents agenda and the people’s interest are so diametrically opposed. Cuts must be made and he needs to be the one leading the charge but instead he exploits the mess for political purposes. Many of the Democrats in the Senate know this as well but sit silent. Republicans for their part are falling on the sword of no new taxes instead of championing fully the need to cut government.

The fact is these are dangerous times. Going into the the fiscal “ditch” might be painful but if it slows America’s progress towards the Debt wall and maybe even knocks it down a bit we might be better off taking that bumpy ride. Even if we survive the ditch and make through the wall there is still the matter of the Federal Reserve money pit. (something covered a couple of post back). Maybe the best advice is for the American people to get their financial houses in order because it doesn’t look like the government will be anytime soon.

“The Conservative Mind”

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