Thursday, July 14, 2011
The Big Picture
What's really going on here? What's the fighting all about over the deficit and the debt ceiling?
The US (and Europe) has a serious debt problem: http://www.usdebtclock.org/
With a Federal deficit at 100 percent of GDP, and a total debt market at 350 percent of GDP, there is not an economist\financial historian or business leader that doesn't understand that this burden is causing the economy to implode.
GDP is currently officially running at under 2 percent which is considered stall speed. If you compute inflation the same way we did under Reagan, GDP has been flat to negative for over ten years. Yes, negative.
Obviously it's way too late to sit around pointing fingers. Cutting little bits of spending at the fringes or raising taxes marginally on the wealthy will do NOTHING. Unfortunately that's what all the arguing is about in Washington.
So what can be done?
A) Throw out the 10,000 page tax code the ensures big corporation pay nothing because of loopholes while strangling small and middle sized companies so that they all go out of business, and stultifying start ups who can't deal with it. At best, institute a flat tax, or at least lower corporate taxes while closing all the loopholes.
B) End the Four Current Wars and close the 1100 military bases we have around the world outside the US.
C) Cut Medicaire benefits in half. (Sorry Tea Partiers, it's your freeloading that's killing the economy).
That's it. That's where the bleeding is. That's where the bleeding must be stopped. Cleaning the little drops that fall on the floor just won't do anything.
Everybody knows this has to be done.
Why can't it get done? Because the military industrial complex (who benefit from the wars), the fortune 500 (who benefit from the tax code), and the AARP/Tea Party Lobby (who benefit from Medicaire) don't want it done.
So meanwhile we sit around arguing about NOTHING.