The Coming Fiscal Slap in the Face

Here's the wake up call the citizens of the U.S. can look forward to if Obama and Congress do nothing to alter the current path we are on.

1. Expiration of the Bush tax cuts. January 1, 2013 every taxpayer would see a tax increase as tax bracket calculations revert to Clinton levels. For the average worker this would mean about $25 - $30 less per paycheck each week. Or another $25 - $30 given to the government by each wage earner (and not spent on goods and services or saved in the economy.)

2. Higher rates on the Alternative Minimum Tax. This would show up when the tax payer files their tax forms for 2012, or by April 15, 2013. This would be an additional $125 billion taken out of the economy and given to the government.

3. Expiration of the temporary FICA tax cut for employees. For the average worker that's another $20 a week taken out of their paycheck.

4. Increase in Medicare tax rate for high wage earners (part of ObamaCare.) Tax would go from 1.45% to 3.8%.

5. Implementation of the automatic spending cuts as part of the grand compromise reached by the congressional super committee in the debt ceiling/spending deal of August 2011.

6. Expiration of emergency unemployment benefits on January 1st. Will remove $35 billion from the economy.

7. Guaranteed Medicare rate paid to doctors expires on Jan. 1st. Another $19 Billion.

Add it all up and you have about a $685 billion hit on the U.S. economy. That would be the equivalent of double the size of any tax increase since World War II.

Buckle Up!

 

What's the difference?

 

How soon we forget. When the debt ceiling debate was occurring the Republican House floated many proposals including 1:1 spending cuts for every dollar the debt ceiling was raised; spending caps, balanced budget amendment, no tax increases (possible tax reform.) Their rallying cry was "Cut, Cap, and Balance."

In contrast, the Democrats wanted a 'clean' increase of the debt ceiling with NO spending cuts. In fact, they wanted such a large increase on the debt ceiling so as not to have to revisit the debate before the 2012 elections. They also wanted to increase taxes on the wealthy.

Now, how insane do you have to be to increase the debt ceiling to cover two years and NOT cut spending one whit? And you complain because the Republicans didn't go along with this?

Furthermore, Obama got his $890 Billion Stimulus Bill passed and the money was flushed away with barely an effect on the economy. I don't see Obama touting the fact that he ran up the deficit, spent $890 Billion, and unemployment has barely moved.