Although the fiscal cliff has been partially and temporarily avoided, most economists agree that it appears congress has only constructed a barricade to prevent a sudden fall over the proverbial cliff.
This barricade, like those along the side of the road near a drop off, can still allow the smaller things to slip through or go around the barricade and over the edge.
Congress will have to come up with a much better solution to this current temporary solution.
The partial and temporary deal passed by both houses on January 1, 2013, known as the “American Taxpayer Relief Act of 2012” gave the Obama administration most of what they permanently want and paves the way for the balance of their political agenda within the coming year; most will probably come in February.
This bill supposedly extends the Bush tax breaks for everyone into 2013 except for the wealthiest of tax payers.
In reality however, this new bill damages the lower and middle class tremendously.
Even those making under the magic $250,000.00 will see certain tax increases; none the least is the payroll deduction tax. Most Americans will see their take home pay decreased almost immediately.
Much more than this however, is the increase in the cost of goods and services as well as the potential for massive employment layoffs the further we go down the Obama road to full blown socialism and the redistribution of wealth.
Added to this, is the fact that there is still neither a budget nor long range plan to reduce the deficit and we have the making of the soon to be greatest recession ever; not since the great depression but in the history of our nation.
People throughout the country are already complaining of the rapidly rising food and fuel prices.
Although this writer was aware of the rising food prices from media reports, living in the Brownsville/Rio Grande Valley area of Texas did not reflect the drastic increases being reported.
The Brownsville/Rio Grande Valley is the lowest per capita place to live in the United States and doesn’t always reflect the economic trends of the rest of the nation.
Having traveled to Florida for the holidays, it was quite evident to this writer that we are in serious financial trouble as a nation, when to my surprise a loaf of bread was priced at $4.00 and even instant coffee was $5.00 for a small jar.
My shock increased even more when my favorite brewed Starbucks Pikes Place Vente’ size coffee was nearly $4.00, while back in Brownsville, TX it is still $2.89.
The American consumer should remember that business is always about making money. Businesses will always make up their potential loss in price increases to the public and/or reduction of employment through layoffs or hiring freezes.
Bear in mind, as a nation we are still slipping under or around the temporary barrier that congress has put up. Ultimately real sustained measures including a permanent detour must be constructed by congress to prevent our nation from completely slipping through, falling off and taking the barricade with us.
All three branches of government must come to grips with the reality that the necessary detour can only be built through making hard, difficult decisions.
These decisions must include both tax and spending cuts.
As much as the president might want to increase government entitlements, spend the nation into full blown socialism and move closer to complete control of industry and big business, by increasing the tax on the wealthy he will ultimately lose.
Entitlements cannot be extended if there is no money to make such entitlements possible.
Big business will always fight increased government controls and it is the wealthy that provide and create jobs.
The president can attempt to play hard ball all he wants but both parties and both houses of congress ultimately know how money moves in a capitalistic society (which for now, America remains) and hopefully they will come to a long term solution to save our nation’s economy.
As was seen so prevalent in the Clinton administration when reality sets in, Presidential loyalty only goes so far.
© 2013 Dr. Lee W. Outlaw III
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