Take the time to ask yourself the following question.
Why is our economy not operating as optimally as it should?
Then ask the question, why?
President Obama and Speaker of the House of Representatives John Boehner concluded another round of fiscal cliff talks at the White House and it does not appear they are any closer to coming to an agreement.
Both sides are to blame for the mess we are in but many over-look other critical issues contributing to the fiscal cliff. I am talking about issues like demographics or things like our entitlement programs that are unsustainable are the big drivers to our debt.
The crux of the problem is the fact our federal government has over-promised services it cannot deliver at today’s revenue levels. Nobody in Washington wants to admit this because they are in self-preservation mode.
Our government is also too big, way too bureaucratized and simply un-sustainable at current levels.
This makes some sort of resolution paramount.
Here is what we do know right now.
First, we are in debt up to our eyeballs.
Second, we are going to have to get out of this hole somehow or risk long-term consequences for future generations. If action does not happen we may end up with austerity like some of our European friends.
It feels like I am a character in the Matrix struggling which pill to take.
What is the answer?
As you may or may not know, there are two ways to generate more revenue for the government.
The first is through higher taxes, fees, or other forms creatively named revenue raisers.
The second is by growing the economy. This one makes the most sense to me and here is why.
You can raise taxes on everyone all you want but it does not come close to them solving the problems our system has created.
Furthermore, the unintended consequences of raising taxes on a small business community already struggling to stay in business is unreasonable because they cannot afford it right now.
It will also lead to higher un-employment.
The bottom line
We are sputtering along as a nation, and until the dynamic in Washington changes, do not expect things to turn around. What people often over-look is the fact that the federal government plays a tremendous role in our economy.
In the healthcare sector, more than half of the $1 trillion plus industry comes from government sectors and this is before the Affordable Care Act which is the health reform bill.
The sooner our leaders can begin talking to each other the faster we can see growth and cash for businesses to invest in their people through higher wages and other benefits which American workers should have access to.
I just happen to be of the opinion it should be for market to decide wages and benefits not the government.
The United States is spending a trillion dollars more than we are taking in each year, and have been doing so for last 6 years or so.
We cannot afford to do this anymore and leaders from both sides need to step up and provide solutions to the problem.
Is the US riding an artificial high that is going to have to result in a big hangover at some point?
Perhaps this is what it takes before we can have real leadership in Washington and adequate public policy to address the challenges we are facing as a nation.
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