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View Full Version : The Fiscal Cliff


Actor
12-05-2012, 04:06 PM
I probably don't really understand the Fiscal Cliff but here's my take.

The Fiscal Cliff has two components.

Tax reform.
Sequestration.

Tax Reform. This is all over the media so I won't comment.
Sequestration. This is the complicated part. As I understand it...

Social Security payments and some other forms of earned benefit payments are exempted from sequestration.
The remaining part of the Federal budget gets an across-the-board 10% cut.
Manpower cuts imposed by sequestration will be met by attrition rather than layoffs.
The military is the biggest loser if sequestration goes into effect.

Ok. Since entitlements are about 50% of the Federal budget sequestration cuts the budget by only 5%. Assuming that half of this (wild guess) is to be met by manpower cuts through attrition, the immediate effect is a 2.5% cut in the budget.

Ok. Maybe I'm wrong (I hope so), but I don't see a 2.5% cut in spending as making a big dent in the national debt.

Ok. Supposedly Congress can get off their collective butts and find a better way. Cut X more, Y less, and get rid of Z altogether. I don't think so. As Benji Benjamin said "no matter how we figured it, somebody don't like the way we figured it!" It's a damned if they do, damned if they don't situation.