There is a lot of discourse and speculation as to what should be done in Congress to ameliorate the economic consequences of past government actions. These past actions include the Budget Control Act of 2011whose terms go into effect when the ball drops in Times Square on New Year’s Eve. While the term “cliff” postulates an immediate disaster at the end of 2012, the impact of the changes are more likely to have started yesterday and will increase gradually over the next year or more. The delay in reaching an agreement has most likely caused households and businesses to begin changing their spending in anticipation of the changes, possibly reducing the U. S. GDP before this calendar year is over.
If the current laws scheduled to go into effect in 2013 remain unchanged, the impact on the economy could be intense. The combination of higher taxes and spending cuts would reduce the deficit by an estimated $560 to $700 billion. But, that amount is less than half of the annual deficit this Republic is creating! In short, this does not solve our problem! Even this inaction of allowing these laws to take effect is still “kicking the can down the road”.
Regrettably, but perhaps fortunately, this fiscal cliff isn’t the only difficulty the United States must confront right now. Within the next few months, the country will again reach the debt limit it imposes upon itself. This is the same issue that agitated the stock markets in the summer of last year and prompted the Congress to legislate the automatic spending cuts that make up a portion of the fiscal cliff.
If saving an estimated $560 to $700 billion is still “kicking the can”, then what is the solution? The solution is a Balanced Budget Amendment with a Spending Cap set at 18% of this country’s GDP.
Every United States Representative and Senator that loves this Republic should vote “No” on each and every vote of any kind that is brought before the House or Senate until a BBA is passed by two thirds of both Houses of Congress. To do anything else is tantamount to treason, as she or he is perpetuating the destruction of our currency (through inflation), and eventually our society and this very Republic. When I say to vote “No” on everything, I mean everything! This is the immediate issue. Once the BBA is passed by two thirds of both Houses, it will need to be ratified by three fourths of the states. It is imperative that our elected representatives not only pass a BBA, but continue to apply pressure by voting “No” on everything until the BBA is ratified by the required number (38) of states.
Yes, falling off a (fiscal) cliff would be shattering to the economy. But, at least there would be a bottom – a floor to hit. If we do not have a BBA passed and ratified, the cliff we go over (via hyperinflation) will not have a bottom that can be seen. Thus, I am saying that the correct solution to this “fiscal cliff” is to pass a BBA with a spending cap, and refuse to do anything else. Pass the BBA (with a two thirds vote) and sit back.
After the BBA is ratified by three fourths of the states we can discuss where to spend money, and what our tax policy should be. Doing so prior to the ratification of a BBA is premature, and diverts attention from what should be everyone’s primary concern. This is a classic shell game in which you are being asked to watch alleged spending cuts and tax increases, while our debt continues to increase beyond our ability to repay.
There is of course an alternative to my proposal. We can continue with the illusion of attempting to cut spending, and attempting to balance the budget with tax increases. For those who think this is the correct course of action, I ask that you contact me directly. I would like to sell you my interest in lunar real estate. Owner financing is available with the appropriate down payment. A certificate of authenticity is included.
William “Doc” Halliday is a native of Holyoke, Massachusetts. A U. S. Army veteran, he served multiple tours in Southeast Asia. He lives in the Shreveport, Louisiana area, and can be contacted at: firstname.lastname@example.org