Fiscal Cliff and Spending Cuts
What does it mean, fiscal cliff?
It sounds pretty scary, like the end of the world or something. But, in reality, it is nothing so drastic or scary. The term is just a marketing term to fool you into thinking emergency measures are needed. So what’s the worst that will happen when we reach the cliff. Nothing. Got that? Nothing.
But, if we all get scared by the hype and think that drastic cuts are necessary, then, yes indeed, bad things will happen, and the effects will be felt for years to come.
Don’t get me wrong, we can’t just sit on our hands. We have to address the mess this country is in and this is the time to do it.
So, what spending cuts should we do?
To start with, no country has ever, EVER cut its way to prosperity. You might want to ponder that for a moment.
So if the solution isn’t to cut, then what do we do?
We do the same thing we did before when we were in debt to the tune of 125% of GDP, which is much worse than we are today. What we did then was we created jobs programs, we invested in infrastructure, we created the GI Bill that sent people to college for free.
That’s what we need to do this time. We need to do what has been proven to work.
But we still need to look at trimming our budget as well. We need to trim the things that aren’t investments in our country and our economy. We need to stop giving money and tax breaks to the rich and the multinational corporations.
This brings us to the real question. What is spending and what is an investment?
You already know the answer to that. If you go out and treat yourself to a nice hundred-dollar steak dinner, that’s spending that is gone the moment you pay for it. But, an investment, like money in the bank, is there for all time, bringing in more money every day.
Spending for a country is the same. If it’s not bringing in a return on investment, it’s spending. The biggest spending we do as a country is spend on our military. We spend more than the rest of the world combined.
And what sort of return do we get on all those bombs dropped? All those missiles fired? Nothing. We are spending, like a short term steak dinner, on almost every dollar we spend on the military.
Money spent on free education is an investment that returns money to our coffers for the entire lifetime of the student. How about social programs like social security? It has been shown that every dollar invested in the people of a country through social programs like Social Security and Medicare are returned at a rate of $1.27 for every dollar invested. That, my friends, is what’s called an investment.
We need to face this fiscal cliff as an opportunity to stop the big dinner spending spree of the military and move that money into investing in our people and in our roads and bridges and our future as a country.