by Daniel Gardner
Here's the bad news: the federal government is running and controlling our economy through taxes, bureaucracies, and regulations. Politicians are in charge and have more incentives to spend government dollars for their constituents than to budget accountably. Government dollars are either taxpayer dollars or borrowed dollars which will have to be repaid some day.
Here's the good news: politicians in Washington painted themselves into a corner with what the media is hyping as the fiscal cliff. In 2011 they passed a law cutting roughly $500 billion out of Defense and $500 out of domestic programs over the next ten years beginning January 1, 2013. They also set December 31, 2012, as the date a ton of tax cuts would expire which could raise as much as $2 trillion more revenue over the next ten years…that's $2 trillion out of our pockets and into pockets of politicians in Washington. And, that's not counting the nearly $1 trillion of Obamacare taxes over the next ten years.
Here's the problem: Barack Obama (Democratic President and politician) and John Boehner (GOP Speaker of the House and politician) are trying to get themselves and their fellow politicians out of the corner they've painted themselves into. They are likely to make a deal eliminating spending cuts and keeping at least some of the tax hikes.
What effect will this have on we the taxpayers in 2013? We'll all see higher taxes reduce our take home pay, some of us will lose our jobs or our hours will be cut back significantly, and some of us will lose healthcare benefits. But, we'll get used to it. This is the new normal.
You know how we used to have good times and bad times with the economy? Well, those days are over. The economy used to be driven by capitalism with winners and losers. Politicians have plotted for decades to level out the economic boom and bust cycles and we're seeing the results today in the new normal.
Only 63.6 percent of Americans are working today, the lowest percentage since they began keeping records, and the lowest number of workers since the early 1980s. The rest of us are living off of government benefits.
Here's the sad news: Baby Boomers aren't really going to suffer for our roles in driving down America's economy, but our children and grandchildren will suffer through the worst economic times in our history. If history is any indicator, and it usually is, politicians will continue to promise they can fix things by gaining more and more control over everything including our daily lives.
The good news is none of this sad news is going happen for another dozen or so years. So, let's enjoy the freedoms and blessings we have today. No need to worry about problems in coming years. Those are not our problems. Someone else will have to worry about them.
And that, friends, is how voters electing politicians to run things will always mess up things for all except the rich and powerful. As John Adams said, "Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There is never a democracy that did not commit suicide." Or, as Karl Marx said, "Democracy is the road to socialism."