So What Happened to the Fiscal Cliff?
The Fiscal Cliff, the one all the news and media were raving about, including me, has kind off fizzled, at least by now. So what happened? What made such an extraordinary event, so ordinary and boring?
The Fiscal Cliff, as I have pointed out before, was a massive deadline on a host of tax cuts, attached to those tax cuts were some big governments cuts, either to Medicaid, Medicare and the military. This all should have made a huge show of political and economic incompetence of January 1st, 2013 as all the new tax hikes and cuts would go into gear and make the US cry on its knees.
But to avert that, a last hour deal was made; a deal so weak, it still is a great display to our political incompetence. The deal included no cuts, which was the primary point of debate for many politicians and the biggest source of income and expenditure. The deal however included some tax hikes on people making more than 400,000$ and couples making over 450,000$ (that’s a great incentive to stay single, huh?) a year, from 35% to 39.6%.
There’s also a 5% percent increase in Capital Gains Tax, from 15% to 20% percent. Estate and “gift” taxes will go up from 35% to 40%. Also, Social Security payroll tax will be increase from 4.2% to 6.2%.
So in a way, most ordinary people won’t get affected by these tax increases, and most wealthy folks won’t get bankrupted by them either. All in all these tax hikes would gain an additional 225 billion in Government revenue, not bad. The real fight however lies in the spending cuts which are out of control.
“That’s behind us. Now the question is what are we going to do about the biggest problem confronting our country and our future, and that’s our spending addiction.”
Said Mitch McConnell after passing the tax deal, and he’s damn right.
Tax increases would most likely do little to fight the massive, huge, monstrous debt the US has collected over the years and keeps collecting to this day. Most of this debt is borrowed to finance dumbass military excursions and shows of power, Medicaid and Medicare which are getting bigger and fatter by the second and, of course, paying interest on the existing debt.
The biggest fight is still ahead, and I can already taste the bitterness on my tongue and the shit in air, because these fuckers waited a whole month to pass this tiny tax deal, what do you think they’ll do once the spending cut deal is on the table?
The most alarming trend our country is experiencing is a division into ideological corners, politicians and people regards the “other” as the devil-incarnate himself and will not make any compromises. Without compromise, shit like this happens, and it ain’t good for the people, for the economy and for the damn congress which has a better approval rating than probably Nazis.