The Fiscal Cliff for Dummies

Simple Math on the Fiscal Cliff. Forgive my condescending title and tone, but I have to educate a failed Community Organizer/President into the finer points of this math, as he doesn't seem to get it. I am making it my mission to educate and inform him in the popular vernacular of the Dummies book series. Now, are you paying attention Mr. President? Here are some pretty graphs, links and other informative stuff to help you visualize and understand the problem. You see Mr. President, it's not that Americans are taxed too little, it's that we are spending too much. It's spending. It's spending. And oh yeah, it's also spending. We do too much of it as a Nation. You do too much of it as a President. You have been spending like a drunken sailor trying to stimulate the economy, expand government and it's necessity to our lives promising it as a panacea and cure for the economic ills we are suffering, but it just isn't working. Not surprising, spending your way to prosperity hasn't worked anywhere, ever. Mr. President do you see those really long red icicles that go way, way, down to the bottom? Yes sir, I'm sorry those would be your years.

 We spent  $3,600,000,000,000 (that is 3.6 Trillion) According to the CBO figures for fiscal year ended Oct. 2012,  of that about 50 cents of every dollar we spent was borrowed. So that means 1.8 Trillion of deficit spending is added on to the national debt that is now nearly $16,300,000,000,000 (That is 16.3 Trillion)  Lets break such a large number down to size, shall we?  October 2012 monthly spending was the largest single month of spending in our Nation's history. It came in at over $122,000,000,000 (that is $122 Billion)  President Obama do you see how it's only 3  commas for a Billion instead of 4 commas for a Trillion? Ok, and a trillion is a thousand billion dollars or a million million dollars, Capiche? O.K. good.  That breaks down to $3.95 Billion per day. Still with me Mr. President?


( First a little history on the opening negotiating position for Obama)


According to the N.Y. Times.

Nov. 13 The White House confirmed that President Obama’s starting point in budget talks with Congressional leaders would be the 80-page package that Mr. Obama sent Congress in September 2011. The 10-year, $4 trillion plan calls for $1.6 trillion in new revenues. 

 My Emphasis and added comment. (Folks, this is the budget that was presented by Obama and brought up for a vote by the GOP Controlled House, you know those wascally Republican's that oppose and block his efforts?..... So for two consecutive years they put it up and it got ZERO votes, not even one single Democrat, or Republican voted for it in the House. It received Unanimous Bi-Partisan rejection. The same budget went to the Senate controlled by the Democrats, two years running, and again offered up for a vote.  Oooopsie.... again unanimous and ZERO, not one Republican, nor Democrat Senator voted for it.  So this was his serious effort to avert the fiscal cliff? This was his OPENING FRAMEWORK and SALVO?) 

Nov. 29 Treasury Secretary Timothy F. Geithner gave the House speaker, John A. Boehner, a detailed proposal with $1.6 trillion (my emphasis added, Whoa...What happened to the "only" $800 billion over 10 yrs. you campaigned on? Oh yeah, I forgot  you came out of that meeting with AARP, SEIU, and moveON.org, the day after the election and they said you were going to double the whack-job you planned for the Rich in tax increases over 10 years)  $50 billion in immediate stimulus spending, home mortgage refinancing and an end to Congressional control over the debt limit; (my terrified emphasis added)  it also set a goal (my emphasis added, not cuts or reductions, just... goals..uhuh...) for $600 billion in reductions from Medicare and other social programs.

Let me just say Mr. President, if you had to sell cars you would starve. You were asking America to pay MSRP during the campaign before the election. Now you are counter-offering we Americans the car for MSRP plus a doubling of the MSRP?  Wow, thats some second sticker Mr. President. Usually the second offer is lower not double the original asking price! I sure hope you weren't offended by the laughter Geithner's offer was received with by those Senators. Well since then you have "countered" your original offer that was double your campaign offer, down to your now desired New Years tax increase on the "wealthy"  of  "only"  $1.4 Trillion from the 1.6 Trillion you sent Secretary Geithner to offer on Nov. 9.   Now Mr. President, can we tell Americans this is your final answer? For now it is? Ok, well I guess we will have to go with that. (Man I sure hope you didn't let Geithner use Quicken Turbo-Tax to figure all this out) So lets not add your increased spending request, or figure there will ever be a reduction with your use of the word "goals' in your proposed entitlement spending savings. By the way great job keeping your media buddies in the mainstream media mum on the hefty Death Tax increases and your proposal to reduce the taxable estate value more than two-fold. Those are slipping right under the radar thanks to your cozy media relationship I don't think anyone will notice or cry foul until the family farms and businesses are liquidated to pay those taxes when their loved ones pass on and by then it will be too late.

O.K. but I digress... lets stick with October, 2012 Budget/Spending figures and do the math.

 So we have $3.95 Billion per day of spending. If Congress agreed to the latest Obama offer and increased taxes $1.4 Trillion over 10 years that would break down to $140 billion per year in additional tax revenue, and that breaks down to a daily amount of $383 million per day or if you will,  less than 10% of our daily spending amount of $3.95 Billion per day. Remember half our spending is borrowed money. So assuming we now have 10% of daily spending handled that still leaves a 40% gap to close just to get to non-deficit spending.  We will not even have begun to pay down the over 16 Trillion in National Debt, Six Trillion of which, you alone Mr. President have packed on since you came into office.



Your insistence on raising taxes on the top earners and producers in America, flies in the face of all economic logic and reality ignoring the economic impacts and recent precedents of disincentivizing success. You make no provision for those about to be crucified to invest differently or divest accordingly in self-preservation of their hard earned wealth and income. You ignore the possibility that raising rates on the top earners would not follow the recent experience and precedent of increasing taxes on the wealthy in the U.K. which resulted in a reduction of revenue by 60% from the prior year after they taxes on top earners up to 50% (10% increase) on the "Rich".   Well you are special so you certainly will be immune to such precedent don't you think?  Just in case though, start your "campaign" speech and talking points now if you have to hit the road and explain to Americans how you will have to raise taxes on everyone to fund the shortfalls from your ill-conceived action.

So Mr. President, what is your plan to close the gap after you nail the Rich guys? How do we get there? Tell us, please. You haven't provided one single concrete proposal for a budget cut, reduction, or elimination of any Federal spending outlays, programs, entitlements, military cuts, or discretionary budget spending cuts. You offer instead "goals" instead of cuts and then have the audacity to propose new stimulus spending and programs!  Well your "goals" are not legal tender in these United States anymore Mr. President. We have drawers full of  IOU's with your portrait on them that say "In Obama we Trust"  that promised all the Green Jobs, all the Shovel-Ready jobs. You promised us Stimulation of the economy from your Stimulus Program, and that worked like Ex-Lax ten years past the pull date. Thanks but no thanks, keep your goals. We want action, we want serious efforts and purpose to cut the bleeding that is killing America, our economy, and our future. Our National debt is in excess of 100% of our annual GDP, it was in the 70% range when you took office. This is unacceptable, you were elected to fix it. Raising taxes and pounding your chest gets us 10% of the way there, we need 40% more. Now, I have armed you with an education on Fiscal Cliff 101, so quit being such a fiscal Dummy. Oh forget it! Just follow the lead of Congress, like Bill Clinton did and do the deal with loophole eliminations, accept the GOP recommended cuts, then take the credit for their solution like the fondler-in-chief did and lets get this economy moving again.


Michael R. Bednarz





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Why Obama's Second Term Will Look More Like a Romney First, Than Obama's First

 The Election of 2012 is over. The dust has settled. The euphoria of  the Victorious and the disappointment of the Vanquished fades hour by hour in equal measure into a post-election political hangover. This hangover shared by both the Left and the Right is soon to be eradicated by the sobering reality of the fiscal State of the Union, the agony of our jobless, and the financial consequences of a grim and disastrous near and long-term future for ourselves, our children, and even our grandchildren; if we do not act together as a nation right now.

So, It's now November 8th, 2012 just two days after the Election with the smoke cleared. Where are we?  Right where we were on November 6th, 2012. The House is still in GOP control. The Senate is still in Democratic control.  Obama still occupies The White House. America voted inexplicably for the status quo. Democrats and Liberalism did not receive a mandate in the close 2012 election.

Electoral Map 2012 Election- County by County- Red are Romney won Counties- Blue are Obama won Counties, Color Alaska as Red.

The nation is clearly divided. In fact, the reality for the Liberals and Obama is that we are three days in and have essentially begun Obama's Lame-Duck second term. That's right Obama is a Lame Duck President for a minimum of two years and likely four unless Obama finds leadership ability and skills he has yet to exhibit and leads his party to compromise. I know that may be a shocking take on the events of election day 2012 and flies in the face of the conventional wisdom by the mainstream media's political talking heads, Democratic leaders like Reid, and the pundits on the Left advancing the notion and mistaken analysis that this was a mandate worthy of Conservative and GOP change. They would like us to roll over and simply accept their failed agenda by the fiat "to the victor goes the spoils."  Nothing I believe could be further from the truth. Not only are we where we were on November 5th, 2012, we are also right where we were in November of 2010 after the mid-term elections swept the GOP to victory. Why would America vote for no change in 2012 when they voted for Hope and Change in 2008 and then again for massive change in 2010? A friend of mine admitted to me the morning after the election that he voted Obama for a second time.  I was dumbfounded. I asked him why he voted for Obama? Now this is a very smart man, he owns a successful business, is a Vietnam Veteran who served as a Huey gunship pilot with five "emergency" landings in service of our nation.  I have the utmost respect for this man as an intelligent, thoughtful human being and dear friend. His answer? "Well Obama has his nest formed, I think now he can really get comfortable and do things." I had no answer or reply for that one at that moment, politely offering that I had never heard that as a reason to support Obama before. But if I have to chalk that one up to category of response, I would call it ambivalence; he didn't cite one single first term Obama accomplishment, achievement, or one single new initiative or program as a reason to vote him in for a second term. I thought about what he said hours later and it got me to thinking. Americans lost an opportunity to vote for real change with Romney and they didn't do it. Why not? I think they didn't in part because they are still waiting for the change that they were promised and never got four years ago. This is what I think my friend was saying in his own way.  Voters in 2012 hoped for and desired the undelivered change that Obama promised four years ago. Promises like the end of divisiveness and partisanship. Promises like putting Americans needs and interests ahead of special interests (Well Obama was obviously inferring Corporate and Wall Street interests and lobbyists;  not Unions, NOW, NEA, Labor, or Environmental Lobbyists). I think they wanted to give him more time to make good on those promises. In some ways it was similar to returning George W. Bush to a second term over Kerry because though he was unpopular, voters wanted to give him more time to finish the war in Iraq, and Afghanistan. This may explain the sentiments revealed by my friend as giving Obama more time to finish and follow through on some of his promises. Conversely, I think they kept the status quo with Congress in a sense as a challenge to President Obama, Speaker Boehner, and Harry Reid that here is the hand that 'we the people' have dealt you, now you have to work together and figure out how to solve America's problems together for the next two to four years. Now go get it done.


So here we are three days into the post-election future with everyone wondering what the future will look like and how the results of the election will unfold. I believe the Liberal left wing of the Democratic party is in for a rude awakening; the future will look like 1995, and how 2011 should have looked following the midterm 2010 election, but will now. It will look that way because Obama's campaign rhetoric and policies he ran on won't solve the country's problems and Obama knows it. He knew it even as he was spewing it as raw undigested red meat to his rabid left wing base to secure them for a second term. The next Obama term will be shaped more by the 2010 election, than the 2012. I predict Obama's second term and Presidency will be more like Romney's first would have been, than Obama's first was. Or if you prefer I also believe that Obama's second term will look more like Clinton's presidency after he lost the House in 1994.

Obama will lower the Corporate tax rate. Obama will extend all the Bush tax cuts, even for the "wealthiest" Americans earning $200k or more. Obama will adopt many of the budget ideas and reforms put forward by Paul Ryan and the House Budget. Obama will expand domestic energy production and relax or repeal executive orders and regulation put in place previously that hampered our domestic energy independence. Obama will change face and approve the Keystone Oil Pipeline. Obama will support the Coal Exporting terminals in Washington State. Obama will end his war on Coal in America before the war in Afghanistan is over. Obama will cut spending and entitlement growth. Obama I believe will even rethink some aspects of Obamacare and allow modification of it. Surprised? Think its impossible?  I think it is far more probable than impossible, read on. These are policies adjustments overdue by Obama following the 2010 midterm elections; they were only put off to secure his second term lest he lose his left-wing base. I think Obama has Clinton's road map from 1995 to follow and he would be wise to do so. Up to now Obama has perfected the rhetoric of promising bipartisanship and has gulled and duped the American people for over four years into thinking the Republicans have been blocking his initiatives and they were unwilling to work with him. He has ridden that old pony ragged for four years (I know the GOP has only controlled the House since 2011 but the truth has never been important to Obama) it's time to put that haggard old pony down.  The truth is Obama's last two years budgets received not one single vote from any Democrat or Republican, in either the House and the Senate. If he does not now embrace the same pragmatism he should have embraced after losing the House in 2010 to GOP control as Bill Clinton did when he lost the House to the GOP in 1994, Obama will be a Lame Duck President; starting now. He will ensure an agenda and history of failure. Obama's legacy will be remembered as a Presidency of mediocrity. He likely would also preside over and be blamed as the agent of destruction for the United States of America as it collapses under the weight of fiscal crisis and economic failure. Therefore, I predict that Obama will finally embrace compromise, and he will not impose his campaign agenda as ineffectual solutions for what ails us because he knows they haven't, and won't work. I believe President Obama loves America and it's citizens, and if for nothing other than his own ego,  his own personal legacy;  he can't let that happen. He must duplicate the example of Bill Clinton who took the hand of cooperation offered by Gingrich, and with political humility born of necessity, Bill Clinton executed Gingrich's "Contract with America" playbook like it was his own. Clinton did so to the adoration of the Left, and most Americans who ignorantly and mistakenly credited him with what in reality,  was Gingrich's genius. Gingrich and the GOP were fine with that all that really counted was a thriving nation. Should Obama do the same, Conservatives will be fine with that again, take the credit and adoration, all we care about are the good results.  To date, Obama has so far rejected the extended GOP hand of cooperation since taking office in 2008. Even after the 2010 mid-term elections once again the victorious GOP offered their hand of bipartisanship after taking the House in a political Tsunami. Obama's response? He did absolutely nothing except double-down on divisiveness, class warfare, laying the groundwork for his reelection on that basis in launching a reelection campaign of unprecedented vitriol and personal destruction that made this the ugliest campaign in my memory. Obama is freed now from election constraints. I believe he will shock his own base and Conservatives as he adopts more ideas and solutions championed by Mitt Romney and Conservatives, rather than regurgitating his failed policies form his first term. In eerie similarity he could say almost the same words to Boehner, about being relieved of elective constraints and pressure, that he did to Russian President Medvedev famously caught under an open mic."This is my last election. After my election I have more flexibility."  Will Obama use this flexibility to harm America and it's  National Security and prosperity, or will he use it to help  America? He must chose wisely.

Obama holds the GOP.gov blueprint at GOP Leadership Conference just prior to the 2010 midterms. Obama was dismissive then, but now?... Now he needs to take Boehner and the GOP leadership up on their standing offer to work together.

 Obama is now free of all reelection constraints upon him to now to make good on his 2012 slogan "Forward."  By contrast, the GOP House has to continue do the job they were elected to do in 2010 and now again in 2012. GOP Representatives were elected in 2010 and 2012 to stop the reckless out of control spending, tax increases, and policies that don't advance America's recovery and success. The election of 2012 didn't change that;  it reinforced it. GOP Representatives have a commitment to uphold to their constituents and voters. That commitment is secured by the fact that their future is renewable every two years and they are without term limits. This in reality gives the cards for a better hand and leverage to Boehner and the GOP going forward. Does that mean that we won't compromise or work with Obama and Democrats? No, but it means that we will be in a better position to dictate the compromise in a more principled way consistent with our sincere convictions.  Obama is limited by term limits, he's gone as far as he can go in politics this is it for him. Consequentially abandoning the Left and the principles Obama has espoused and run on is not a problem. Clinton did it when he embraced compromise with Speaker Gingrich and the GOP's Contract with America, and to this day the former fondler-in-chief is more popular and beloved than ever. Obama's is a history of politics of convenience.. If it's good for him, that's all that matters. If someone, a position, or an issue is no longer of value or doesn't serve a purpose that Obama requires, you are discarded. Obama's political trail to the top is littered with discarded former supporters. Just ask all the Democratic former House members that reluctantly staked their political careers to make Obamacare law. Ask the poor forgotten souls that Obama used and leveraged in the housing projects of Chicago like Grov Parc. Abandoned in rat and roach infested slums, replaced by the campaign cash of their slumlord Valerie Jarrett who now serves as Obama senior adviser, Ms. Valerie Jarrett. Take the money, forget them and  move forward. Just ask Steven Rodgers, an early supporter of Obama's political career that helped fund and raise campaign money for him when Obama begged him for support and friendship. After he was elected, Rodgers a professor at Northwestern University School of  Management, called Obama asking him to come fulfill his donation promise following his election to the US Senate to come speak to his students. Obama refused to honor that promise Obama replied. 'Come on, man, you should know better when politicians make promises.' Abandoning his principles, supporters, and patrons will come easy for Obama, it always has.



The way forward? In a sense now on day three of his new term, Obama has reached a fork in the road. As I write this I see a story on the wire that Obama while meeting with Congressional leaders about a path forward,  has stated "a tax increase on the wealthiest of Americans is a must" (over $200k per year income and up) let us hope that this is only residual campaign hubris and negotiating posturing for the sake of his supporters. Should he go left as his hard core supporters expect, towards the demagoguery and rhetoric of his last election that he knows deep down only served to elect him and will not serve to secure America's future nor move it forward, he will be he lamest Duck in history and secure his place in history as a failure. Or go down the right path at the fork, toward compromise by adopting more of the GOP sponsored common-sense economic policies and solutions that Mitt and GOP leaders proposed to prevent a looming debt crisis, create jobs, and secure American prosperity as we approach the tipping point for our national survival.  Obama must choose and follow Clinton's example, go to the right even at the risk of looking Romneyesque. Just as Clinton risked being hitched to Gingrich. All the rancor against the Rich, attacking  Businesses large and small, Wall Street, Corporations, Big Oil,  plus his pandering to, and support of Big Labor, Environmentalist and other special interests of political necessity, is now null and void. America's survival and Obama's legacy are at stake. Be magnanimous Mr. President, I offer my sincere prayers for you that you take the right path  securing our future and that you will seize your destiny.



Michael R. Bednarz






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