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The Compromise Scam

To hear the talking heads, Americans are demanding compromise. The upcoming "fiscal cliff" is an impending disaster demanding compromise (conveniently defined as Republicans surrendering their opposition to tax increases) to avoid the event & its expected consequences.

This is laughable.

Many Republicans are entering these "negotiations" discussing what they are willing to give up against Obama and Democrats only listing what they will not do. This is a recipe for failure.

As evidenced by our current situation, there is no guarantee that a "compromise" would be any better. The "fiscal cliff" is actually a result of a compromise between Democrats & Republicans to resolve the "debt ceiling" crisis less than 18 months ago! They were celebrating their ability to "work together" the very deal that they now malign.

History instructs that these "deficit reduction" agreements have zero chance of success. There have been at least 8 such agreements since 1981 (a period of time that has seen our national debt increase from $900B to $16T). In each of these occasions, the increased taxes take effect immediately (or retroactively), but the reductions in rates of spending growth (aka "cuts") never materialized.

Our current yearly fiscal trajectory is approximately $2T in revenues financing $3.5T in expenditures (or a deficit of about $1.5T per year). Assuming the $4T in "deficit reductions" over 10 years that Obama's plan claims, our debt would still increase in the range of $25T. The tax increases on higher income Americans that are Obama's "firewall" would only raise $90B in additional revenue (assuming it meets his expectations) - or 8 days of government operations.

In my opinion, any taxpayer who supports this effort is a fool. If politicans want to resolve our deficit / debt, they can cut spending (which is our problem). Since historical "compromises" have been unsuccessful, the best way that leaders can promote an environment of trust would be unilateral spending cuts (real & year-over-year).

From my opinion, spending restraint has nothing to do with the tax rates of any American. Resolving our fiscal situation has nothing to do with ability; it is about will.

-SD