The Bible Is Truth

If you think the Bible is truth, why aren't you reading it? A good plan for the New Year is to start. 

Dancing Rita

I thought this was a lot of fun to watch. 

Praying for the Fiscal Cliff

I think that the chart on the right will explain why I hope for a fiscal cliff. If we go off the cliff, the US government deficit goes down a lot. If you want more information, you can read about it on Wikipedia. 

While the fiscal cliff will not solve all our fiscal issues, it will solve many of them. The main issue I have is that next year’s estate tax will force many family farms and business to be sold to pay the death tax. I do not think the world will come to an end if the tax structure reverts to what it was 10 years ago, plus an additional  3% increase in the tax rate if you have a large capital gain. We have to take our collective medicine. Yes it will taste bad—no cherry flavoring for us! The automatic spending cuts associated with the "cliff" may be the only way to actually "cut" spending. (Remember that there are in fact no cuts, just a decrease in planned increases.) 

We will still need to reform Social Security. This will be relatively easy. A modest change to a cost of living calculation from the current wage increase method to determine the cost of living increase is needed. This is rather arcane, but the bottom line is a smaller increase in the increase of the social security checks every year. We can also gradually raise the retirement age more than the current law does, and we move the coming Social Security bankruptcy from 20 years from now to 50 years from now. 

Not the medical dog I have in mind.No doubt there will be some sort of deal next year to snatch defeat from the jaws of victory, but until this happens I have switched from guardedly pessimistic to guardedly optimistic. I expect I will switch back next year. 

The main issue that will dog the US until it is solved is the US medical system. It has reached the point that for me, I have more confidence in the Russian medical system than the US system. The system is so bad that a single payer system would be better. I do not think this is by design. Never underestimate the power of stupidity. I would prefer a free market approach, but that seems unlikely. 

So get out of debt, and pray that Obama and Boehner will not come to an agreement. 

My Future's So Bright: 80% Cut In Spending?

When I wrote an introduction to the Grant interview I posted Saturday I mentioned that the federal government being forced to cut expenditures by 80%. I said it was not a good thing. My friend Doug Young said this in the comments.

Wow! And 80% cut in federal spending? Something a libertarian can only fantasize about. If that happened, the greatest economic boom in American history would result. Just look at post-WWII. No one would go hungry. No one would go without decent medical care. Old people wouldn't get kicked out of their homes. Rather, with government out of the way and prosperity abounding, charity would be widespread, and less needed. One can only hope.

While I would in the abstract agree that transitioning to a smaller government is desirable, and inevitable, the path to get there is dark. For while I postulated a scenario with 80% spending cuts, this same scenario says that there will be no tax cuts. So the result would be like this.

A senior now receiving $1,000 a month social security and having 90% of their medical bills paid would now get a check for $200 and only have 20% of their medical bills paid. The federal government has turned seniors into dependent clients of the government. The effect would of such cuts would force most seniors back to living with their children. Think about it. You are in your 50's, your kids are finally gone and suddenly up to four people suddenly move in. In our divorce ridden society the parents might not even be married anymore, or worse the now divorced parents might have to live in the same household with their ex spouses new spouse!

No, it will not be pretty.

The difficulty is the libertarian expectation that the current working generation will simultaneously support the current retirees while saving for their own retirement. Most people would not be able to do it. Factor in student debt, oil prices skyrocketing, and state government pension costs, (I read that Illinois that each household owes $50,000 in costs for this expense), and we are truly ******.

Sorry for making you think a bad word, but I could not think of a word strong enough to replace it.

I have been told I am pessimistic. Maybe. I have even said I am guardedly pessimistic, as I still hope we can limp our way through this.

I remember the pop song from the 80's, "Our Futures So Bright, I Gotta Wear Shades."

The song is actually a portrayal of a quite horrible future. I did not get the point of the song in the 80's. I do now.

Sleepy Man Banjo Boys

Really outstanding music.