As we discussed in Friday's MULLINGS "(Five Percent") a relatively minor cut in Federal spending would not, depending upon how it's distributed, cripple the government.
President Obama's tax plan will, his team claims, raise $1.6 trillion in revenue for the Feds over 10 years. Even I am confident that I can do that arithmetic in my head: $160 billion a year.
Including 2013 that means additional income to the government of $800 billion over the next five years.
Problem is, the White House' own estimate show accumulated deficits of over $3.4 trillion or $680 billion a year (it is not a straight line as the budget calls for a deficit of $901 billion for this year alone).
Subtracting $800 million from $3.4 billion still leaves $2.6 trillion in accumulating national debt over the next five years.
Adding the sequester savings ($150 billion a year or $750 billion over five years) to the increased revenues we get $1.5 trillion.
We are still over $1 trillion short of even balancing income and expenditures, much less reducing the debt.
With all of these numbers bouncing around, I am absolutely certain I've made an error or two. But, assuming I'm in the ballpark, all this talk about the fiscal cliff may be more income protection for the millions - hundreds of millions - of Americans who get money through aid, guarantees, working for, or selling things to, the federal government.
I hope I'm wrong, but it seems to me that we have long since erased most, if not all, remnants of capitalism from the American economic system; and it happened way before a guy named Barack Obama became President.
The nation will collapse if the Federal government doesn't continuously feed the economy. Forever.
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