Should we just let the sequestration happen?

Watching the Sunday morning new shows over the weekend, I was stunned to see that while there was much discussion about whether taxes on millionaires, that now includes families making over $250,000 by the way, but none on what spending to cut.  Not one of the members of the House or Senate, or even the pundits for that matter, were calling on the President and Congress to cut spending.  

It seems that all the concern around the Fiscal Cliff negotiations is extended only to taxes, not the out of control spending that is driving the country toward bankruptcy.  All of the participants, regardless of party, spent their time lamenting how this tax rate increase or removing that loophole would increase revenues.  I heard plenty of Republican's willing to dishonor the Norquist pledge saying it doesn't matter in this time of trillion dollar deficits, but I did not hear Democrats pledging to play their part and reduce entitlements. This is the story we've heard from big government for far too long -- no matter how much revenue the Federal Government is able to collect, they will be able to easily spend it all.  Keynesian Democrats have been convinced they can spend their way out of the recession, and see where that's gotten us.  And no matter what lip-service we've heard over the years from Republicans on big spending, both parties are complicit, but we are in WAY over our heads with no end in sight.

1947-2012 Federal Government Tax Revenues vs. Spending

Federal Government Tax Revenues vs. Expenditures

Federal Reserve Bank of St. Louis

October 4, 2012

We need to take a serious look at ALL spending, and right off the bat, begin means testing for Social Security and Medicare.  Is it theft to exclude payments to rich seniors who have paid into the system their whole working lives?  Yes, but it has to be done.  Frankly, social security is a drop in the bucket for wealthy people who can afford their retirement without it, and those same people should not be partaking of government sponsored healthcare.  I know they have paid into it, but they are screwing their grandchildren out of a lot more by expecting to receive it.  The current senior population is not "the Greatest Generation" for nothing; they would do what's right and accept the means testing.  Baby Boomers, on the other hand, are selfish enough to not care what kind of legacy they are leaving and would fight it, but again, it must be done as part of comprehensive cuts in all spending.

And what of the "sequestration" that is no longer generating discussion?  Let it happen. We are currently spending about $3.6T a year and bringing in $2.5T.  Sequestration is an idea that has been around for decades, but his statements in the 2nd presidential debate notwithstanding, was promoted by the Obama administration in order to serve as a "stick" during budget negotiations.  It will enforce an automatic, $1.2T cut to spending to both defense and non-defense spending in order to meet a balanced budget.  

However we do it, the people of this country need to fight for cuts, to force Congress to turn from the path we've been traveling and give back the promise of a strong America for our children, not a bankrupt one.

The Stimulus Slide

A fiscal stimulus package is the gift that keeps on giving!  It provides 1) a temporary bump in GDP 2) an equivalent drop in GDP when it's over and 3) a further drop in GDP later as it's paid for by higher taxes or by increasing the debt.  That's why the Congressional Budget Office warned that the Obama stimulus would hurt the economy in the long run.  It is essentially a parachute adding drag to an already labored system. The greater the stimulus, the greater the effects - both positive and negative - with the negative effects outweighing the positive.  The effect is magnified when stimulus money goes outside of the American economy to other countries as much of the Obama stimulus did; we get a smaller bump but still pay the full boat.

Are we so willing to close our eyes to the fate of other big spending countries, or is it selfishness and the growing "what's in it for me" culture?  I think about the future impacts of today's runaway spending and wonder of we're going to follow in Greece's footsteps with unemployment over 25% and people rioting in the streets as the government imposes unavoidable austerity measures?  Unless we get spending under control to the point where we can actually cut the debt, we are well along that road.