Stephen Green on the real “fiscal cliff”
Tonight I wanted to mention a column by Stephen Green of Vodkapundit, titled Your Wednesday Dose of Doom and Gloom, where he talks about what he might say is the real fiscal cliff we face within a few years: our deficit spending and national debt. I think his closing paragraphs really bring this home:
We can’t tax our way out of it, because there aren’t enough millionaires and billionaires. We can’t borrow out way out, because we ran out of lenders years ago. The best we can hope for is that the Fed manages to keep inflation relatively tame. That is, 10% for four years. And that rate for that duration cuts the value of the dollar by about half.
Yes, Bernanke will chop the top off of your savings. But he’ll also wrangle that $20 trillion in debt down to a more manageable $10 trillion, so that Congress can keep paying out the goodies to the voters who don’t possess any savings.
And those voters outnumber you and are more politically active than you — that was proven decisively three weeks ago. If you receive benefits, it doesn’t matter if a Big Mac costs $12, provided your benefits are indexed to inflation (and they are).
But you, you poor sap who set aside something for retirement or for a rainy day…
…it’s the destruction of your savings that will make it possible for some other guy to pay $12 for that Big Mac. Because it’s either that, or Greece. Or Zimbabwe. Or worse.
That’s the real fiscal cliff, and we’ve been puttering towards it now for a long time. The only question remaining is if we keep puttering, or if we hit the gas.
The comments are pretty good too, and some of the ideas therein are worth considering.