I have to hand it to the clowns in Washington and the greedy snakes on Wall Street — it seems all you hear about on every media outlet is the pending fiscal cliff. To hear them talk, it’s the end of the world. But just like the Mayan version a few weeks ago, it’s more BS that these few want you to believe. If no “deal” is made before the new year, tax rate and revenues will go up, and spending will go down.
Think about it – isn’t that exactly what Americans want, and what they just voted for in November? The tax rates will return to the Clinton era rates, when 23 million jobs were created, the economy grew substantially, and we had a surplus — not a deficit. What’s wrong with that? Add to that military spending cuts with two wars over, and you have a recipe for economic growth. So what’s the issue?
Wall Street, the super rich, and big business do not want to give up any of their greedy gain made during the Bush years, which continued under Obama’s first term. For these greedy, there is never enough. They always want more.
So what will really happen when no agreement is made and tax rates and revenues go up? Well, at first the stock market will drop. Maybe even substantially. And there will be a lot of clatter about companies laying off more people to maintain their “bottom line." But then the wiser — and likely the greedier — in business (and eventually on Wall Street), will understand that a new normal is occurring.
This new normal will mean they will have to pay a fairer share of the costs of our society and government. This new normal where CEO pays fall from 475 times their employees pay, back nearer to 40 times as it was pre-1980’s. A new normal where business operating income percentage is reduced, but operating income dollars still grows, because the economic market is growing. A new normal where more people are employed, making liveable wages that they spend on housing, food, transportation and consumer goods.
This will drive the economic growth that is needed, and create the tax revenues needed to reduce then eliminate the deficit.
The rich will still get richer, just not at the absurd rate they are today, and not on the backs of the rest of us taxpayers. And Wall Street will recover, once they understand that getting a smaller return is much better than getting no return at all.
So just like the Mayan end-of-the-world I say don’t worry about this fiscal cliff. It will be more like a ski jump than anything else.