The Sky Is Falling ...

So sayeth Chicken Little ?

No, So sayeth the 8 year occupant of 1600 Pennsylvania Avenue.

And, as was the case with C.L., his scare tactics come down to a lot of clucking and no substance.

Why so Galagher?

America is well on its way to a $17 Trillion Dollar Debt or some 100% of its annual GDP.  Moreover, its annual deficit - since the time the Democrats took over the White House, has totalled in the Trillions and continues to rise.  With the advent of their new Health Care in a matter of weeks - these numbers can be expected to climb exponentially.

So what does America need to do and fast - that's right, 'raise taxes and dramatically reduce spending'.

So what does the Fiscal Cliff do - you got it - it 'raises taxes and dramatically reduces spending'.

So what are we missing?  Not a thing - the sooner America falls off that cliff, the better.

Even the Republicans - had they won the recent Presidential Election - were in for a big surprise.  They kept saying they were opposed to more taxes but continually failed to acknowledge the deep hole the US has dug itself into and that cuts alone will not be enough.  Higher taxes are needed in concert with those cuts.

The Dems fearless leader wants tax increases - but just on the rich.  Makes a great sell given that the vast majority of Americans - 95+ % do not find themselves in that exclusive category.  But it won't work - there are not enough rich to make much of a difference.  Plus, that small percentage - the rich - create wealth through the creation of jobs.  Do you seriously think they will hang around and let themselves be the only ones taxed  higher?  In that regard, keep an eye on France where a 75% income tax has been imposed.  Great for Germany and the UK. 

Even the Clff and falling over of same, will not be nearly enough to reverse their debt / deficit buildup:  estimates put the savings from doing so at a mere half Trillion Dollars.  The new costs associated with the Health Care implementation of 2013 itself will exceed those savings.

So what does America need - it needs a few more Cliffs to fall off.

The only reason America has not already been deemed a basket case by the world's investors is the fact that many of those same investors are using the States as a refuge from even greater financial troubles in the EU.  The day is quickly coming when even they will see America for what it is - a sinking life raft.

For now, America's only hope, in the short term, is to take the plunge from the Cliff.

Just don't bet on it happening though, since both the Donkey and the Elephant continue to live in a world of their own - in the Zoo.


As I see it...

'K.D. Galagher'