Robert J. Samuelson: 'Fiscal cliff' compromise solution not hard to see

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  • Res Novae Ashburn, VA
    Nov. 20, 2012 7:18 p.m.

    My work involves government contracts, and I assure you that the sequestration cuts are NOT simply doing away with inflationary increases in defense spending. They are 10% across the board and they will hurt because of the way they are allocated to affect even high priority defense programs. Have no doubt, this *will* affect national defense. I deal with the projected impact of this every day, and I know that thousands of people in the public and private sectors will feel this acutely.

    The economic impact is also dire, with GDP expected to drop to negative growth, and a 1% increase in unemployment projected. The money spent by the Government is injected back into the economy. Cut off 10% of it, and the economy contracts in the same way that your spending contracts if you take a 10% pay cut. The knock-on effects of that ripple through the entire economy.

    I don't disagree that the national debt is a critical issue. But it needs to be solved through responsible, targeted cuts rather than a blanket budget axe. The sequester was set up as an absurdity to incentivize compromise. It failed, and now the joke's on us.

  • Steve Cottrell Centerville, UT
    Nov. 20, 2012 1:00 p.m.

    This editorial may not provide all the solutions, but it seems like a collection of reasonable starting points for congressional debate and negotiations among those in Congress and with the President.

  • Mike Richards South Jordan, Utah
    Nov. 20, 2012 10:06 a.m.

    The budget is a mess of lies and deceptions. As David said, "cuts" are not cuts at all because of the way that the budget is automatically increased year to year.

    "Fining" those who were prudent enough to save for their retirement, while "giving" the government 15% of their wages for Social Security is outright robbery. The government forced each of us to pay with the "promise" that we would ALL receive a "pension" at retirement age. We were not excused from paying based on any "means test". We were forced to pay.

    The government continues to lie to us EVERY DAY.

    Let those who created the mess, solve it. Let them either be prosecuted for taking funds, or let them deliver on their promises.

    Taking money out of the private sector will destroy our economy. It won't solve anything.

    People have got to work. The government should offer tax credits amounting to 50% of the welfare costs to any business who hires someone who is currently on welfare. Everybody wins. The government saves 50% of its welfare costs. The business gets a credit. The worker gets a job.

  • JoeCapitalist2 Orem, UT
    Nov. 20, 2012 8:59 a.m.

    At what point will we kill the goose that lays the golden eggs. Sure Bill Gates will probably be just fine if we hike his taxes another 4%, but what about all those other "rich" people out there (the top 10%) who eventually will get tired of pulling the wagon. There are too few pulling that wagon, too many who have hopped on for a free ride, and some who have the whips out demanding that the team pull even faster.

    Small business owners or married professionals who work their fingers to the bone trying to get ahead in this life will eventually take a good look at how much the government is taking from their labors (without sharing any of the risks) and say "it just isn't worth it anymore".

    We already see that people aren't hiring as many people and I'm sure there are tons of businesses that are never started because the risk/reward ratio is too small with all the taxes and government regulations. In the end, there may just be a bunch of confused people scratching their heads wondering where all the jobs went and there is no one left to demonize.

  • David King Layton, UT
    Nov. 20, 2012 8:15 a.m.

    There is a fact about the automatic "cuts" that I've yet to see any major news outlet report on, so it bears repeating here. The automatic "cuts" are not cuts in the way most of us would define a cut. We hear $500 billion in cuts and think "Wow. The government is going to be spending $500 billion less than last year. That is cliff-like, and is sure to be harmful." In reality, what is being cut from are the automatic increases that Congress has built into the budget. Allowing sequestration to take effect, 2013 would see us spending about the same as 2012 levels on defense and non-defense discretionary spending. The spending rate then rises about 1.5% for the next decade or so. (These numbers are available online for anyone interested). Of course, government spending will be increasing more slowly than it has in the past, so there will be side effects, but it will still be increasing. To me, that makes this an important question: If just getting closer to paying the actual cost of government year to year is supposed to strike fear in our hearts, do we really want government this size?