Wednesday, January 2, 2013

Cato: Grading the Fiscal Cliff Deal: Terrible, but Could Be Worse

January 2, 2013, by Daniel J. Mitchell - The faux drama in Washington is finally over. The misfits in Washington reached a deal on the fiscal cliff. Republicans and Democrats managed to come together and decide that they should get a bigger slice of what the American people earn.
Gee, what a surprise. First, the good news: … …

Oh, wait, there isn’t any.

 Now for the bad news.(link)

My Comment:  While the fiscal cliff deal really stinks, and there is a lot not to like about it such as the $1 spending cut for $10 in revenue, and the pork-laden goodies in the bill, and the increase in taxes, this is only a temporary fix to avoid what would have been worse. I am not going to judge too harshly those who supported the deal. Sure, the can was kicked down the road, but only for two months. At the end of February, the Congress must vote on raising the debt limit. Congress can again argue spending and revenue all over again. 

There does come a time when the adults must threaten to tear up the credit card unless real budget discipline is shown and if discipline is not shown, then the adults must follow through and tear up the credit card. If we keep putting off the necessary spending cuts, then we will have a major crisis. It is inevitable that our borrowing and inflating of the money supply will have consequences. We cannot continue our prolific spending like this for ever. Unless we can get the Democrats to address the problem of government spending and show willingness to address entitlements, then we might as well have the crisis now rather than later. For the next round, I hope Republicans hold firm and risk default if there is not serious effort to address entitlement reform and reduce spending.

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