The federal government’s has missed an opportunity [UPDATED]Published 9:33am Friday, February 22, 2013 Updated 11:36am Friday, February 22, 2013
The George W. Bush administration started a war (Iraq) and instituted a significant tax reduction. These two actions would seem to be incompatible with keeping the federal government solvent.
This turned out to be the case and probably helped to contribute to over-stimulate the economy, which contributed to a larger and more painful recession. Barrack Obama’s administration inherited a fiscal mess.
feel that he handled his first four year in a creditable manner.
After all, Bill Clinton admitted that even he could not have fixed it in four years.
The general consensus in the media and knowledgeable individuals is that the feds need increased revenue and a reduction in spending to get our federal debt and annual deficit under control.
At the end of 2012, the Bush tax bill was set to expire and the Clinton higher tax rates would become effective.
I believe that it was unfortunate, that the Bush Tax Plan was made permanent, effective Jan. 1, 2013. The Clinton-era tax code could have been tweaked, with things like the “Earned Income Credit,” and “the $1,000 child tax credit” being added.
The AMT “Alternative Minimum Tax” could have been indexed for inflation, sparing many middle income tax payers unnecessary fiscal pain and suffering.
The increased tax rates would have affected almost all tax payers, but I believe everybody needs to buy in to the federal fix.
I think that Obama should have bought into the Simpson-Bowles fiscal plan and started to implement it. A combination of the Clinton tax rates and the Bowles-Simpson plan, would have most of the American public and American businesses contributing to the federal fix. I believe this would have resulted in the minimum pain and financial suffering in America.
At this point in time, I see no hope for increased revenue. The fact being, that with future extremely large government spending cuts (primarily, federal jobs being eliminated and reduction of government subcontractors), it is quite likely (100 percent) that there will be a substantial reduction in federal taxes, Social Security and Medicare collections.
This will result in even more spending cuts. It could result in reduced Social Security, reduced government pensions, increased Medicare premiums, reduced payments to Medical Care providers, reduced payments to care homes, etc.
The future of the American economy is very uncertain. It will be very interesting, as this is ground that has never been covered before.
The one thing we can all be certain of is that many of us will be experiencing extreme financial depredation, with few individuals being spared.
I do not see any way out of this fiscal mess. Every day that goes by without a fiscal fix, makes it much more expensive, painful and difficult to correct.
I pray that our politicians work together and come up with common sense solutions to solve this federal fiscal mess. I just hope and pray that it is not too late.
Edward M. Zahler,