Getting real

As we watch the orchestrated daily drama from both Democrats and Republicans on the "fiscal cliff" negotiations, with each side maneuvering to blame the other side for the stalled talks, let's not forget the real facts:

 As a number of writers have been reminding us, the real American problem is that we as voters seem to want big government services with small government taxes. Can't be done. There is no free lunch. So far we have (unwisely) let the Washington politicians buy our votes with borrowed money, but it isn't rocket science to see that can't go on forever.

Currently we are running a federal budget deficit in excess of $1 trillion per year, or about $10 trillion over 10 years. Now the highest number I have seen proposed as cuts thus far from either side is about $4 trillion over 10 years, and about half of those proposed cuts are smoke and mirrors (not real cuts, just accounting tricks). By contrast, what it would take to really eliminate the deficit -- not even paying back the $16 trillion we already owe, just stopping it from growing more -- is something on the order of $10 trillion in real cuts (not accounting tricks) over 10 years. Neither side has proposals anywhere near that figure.

Democrats of course would like to solve the problem by raising taxes. We can do that. Roughly double everyone's (personal and corporate) taxes and we would be in the right neighborhood. Would the American voter stand for having her/his taxes doubled? I doubt it.

If we had a deal such as was proposed in the Simpson-Bowles proposal, with about $2 in cuts for every $1 increase in taxes, we would need about $6.6 trillion in real cuts over the next ten years, and all our taxes would go up about 50%.   I don't see anything near that being proposed either by either party.

President Obama would like us to have a system like the Europeans have - generous pensions, free health care for everyone, federal help (and regulation) in all phases of our lives, cradle-to-grave government care. It sounds great until one looks at the fiscal mess Europe is currently in because of these policies. Somehow that doesn't seem to deter the liberals who are arguing for the European model. I guess evidence doesn't count with them.

It's too bad the Republican party has gone off the deep end with their religious right. We badly need some sound fiscally conservative politicians to help steer us away from the real fiscal cliff looming over the next few years as the real entitlement problems begin to arrive -- fiscal cliffs that make the current fiscal cliff look like a molehill.