The deal to avert the so-called fiscal cliff passed the U.S. Senate with only eight no votes. The House passed the bill on New Year’s Day in another (smaller) “bipartisan” vote, 257 to 167. In other words, the GOP, the party of supposedly fiscal conservatism, caved in on higher taxes for not only upper income Americans but also allowed the temporary Social Security tax cut to expire for all wage earners. Moreover, the estate tax rate increases above $5 million.
In addition, the deal approved by the Congress did not address the spending that props up America’s welfare-warfare. Supposedly, the new Congress will address the federal government’s gargantuan appetite for the people’s money in two months. Prediction: there will be no spending cuts. Spending will increase as far as the eye can see.
If there are any lessons to be learned from the fiscal cliff negotiations and outcome, they are:
- The United States does not have a two-party political system, but one party, the Washington Party, comprised of two wings, Democrats and Republicans. Most Republicans should join the Democratic Party, because they vote with them on the big issues, taxes and spending.
- Both parties want to maintain the welfare-warfare state despite their rhetorical support for fiscal prudence. They want to redistribute income, police the world and start or support wars continuing the “war on terror.”
- The American people also want to perpetuate the welfare-warfare state without paying for it. They have accepted the idea that there is a free lunch when it comes to federal government spending.
- America needs a strong second party: the Independence Party…lower taxes, budget cuts, fewer regulations, sound money and a noninterventionist foreign policy.
- Government grows no matter who is in the White House or in Congress.
- The income tax is the worst tax. The income tax lowers the standard of living and wealth of most Americans, undermines the productive ability of the economy and is used to buy votes and campaign contributions because tax deductions are created for the politically connected.
- Contributing to entrenched politicians perpetuates the welfare-warfare state.
- The Federal Reserve perpetuates the welfare-warfare state by depressing interest rates so the federal government can fund its deficits and debt at dirt-cheap rates.
- America’s fiscal nightmare is still unfolding. Be prepared. Buy gold and silver.
Footnote: Everyone except Scott Garrett in New Jersey’s congressional delegation voted for higher taxes.