There’s No Good Outcome to the Fiscal Cliff Fight
December 26, 2012 by Dan Mitchell
We’ve opened all our presents, spent time with family, and enjoyed some tasty food.
Notwithstanding all this good cheer, there’s a a cloud of doom on the horizon. And that horizon is Washington, DC, America’s work-free drug city.
It appears that there’s no way of avoiding a tax increase. Either we go over the cliff, meaning across-the-board hikes for those who pay federal income tax, or Republicans acquiesce to Obama’s class-warfare tax agenda.
No wonder Santa left one unwanted present.
I explain the grim outlook for Fox Business News, though my display of sartorial Christmas splendor somewhat offsets the dour topic.
In the interview, I don’t say what should happen, though I’ve previously argued that it’s better to go over the cliff rather than give Obama a victory that will set the stage for further defeats over the next two years.
Better to have a bigger tax hike now, in other words, than to create a precedent that will lead to even larger losses in 2013 and 2014.
Besides, it’s quite possible that Obama is bluffing and this is the right way to get all the tax cuts extended.
But I admit there’s lots of guessing and speculation in those sentences.
There is one thing, however, that I can say with complete confidence. We don’t need a tax increase to balance the budget. We can get rid of red ink in just 10 years simply restraining spending so that it grows by only 2.5 percent per year.
P.S. Notwithstanding the last sentence, our main fiscal goal should be smaller government, not a balanced budget.
P.P.S. I was glad to have an opportunity in the interview to defend Robin Hood’s reputation. As I’ve explained, he was a Tea Party guy, helping to reclaim and return money that was taken by the tax collectors of Prince John and the Sheriff of Nottingham. Here’s another Ken Catalino cartoon that sort of makes this point.
I’ve also had to correct Cal Thomas on Robin Hood’s philosophical bona fides, so this is a very common mistake.
P.P.P.S. This is my second attempt at creating a video in the absence of the Cato expert. There’s a hiccup around the 2:25 mark, but I think the picture quality is much better than my first effort.
P.P.P.P.S. If you like the red jacket, previous attempts to be on the cutting edge of fashion can be seen here and here.
