The Conservative Breakfast Group (CBG) will discuss the Week That Was at our meeting on Thursday, December 6. Among the topics that we will discuss will be the “Fiscal Cliff”. Counting of the ballots had not yet been completed when the government and their State Controlled Media started demanding massive increases in Federal taxes and spending. Otherwise, they issued dire warnings that we would all be ruined when we went off the “Fiscal Cliff”. Are these people playing with a full deck of cards?
The CBG meets every Thursday at 7:30AM at the Holiday Inn Express in Chestertown.
On August 2, 2011, Congress passed the Budget Control Act of 2011 as part of an agreement to resolve the debt-ceiling crisis. This act provided that the debt ceiling would be raised so that the borrowing could be increased so the good times for government employees and their cronies could continue until the elections, but that we would then undertake a more rational fiscal policy. This Act forms the basis for the “baseline” scenario outlined by the CBO on August 22, 2012. In it, Federal outlays would fall from $3,563B in FY2012 to $3,554B in FY2013. Revenues (aka taxes) would increase from $2,435B to $2,913B (a 20% increase). In this scenario, the debt held by the Public will fall from 73% of GDP at the end of 2012 to 59% of GDP at the end of 2022.
The CBO report also describes an alternative scenario in which the good times for the government continue to roll as it has in the recent past. In this alternative scenario, a law passed only a year ago would be ignored as would the President’s 2012 Budget. Spending goes up 7% and taxes increase only by 6%. The debt held by the Public will increase to 90% of GDP. The CBO study does not attempt to predict when lenders will no longer purchase our debt.
Is it really the end of the world if government spending does not increase this year? Has anyone heard reference to Budget Control Act of 2011? Please join us in our discussion, especially if you feel you can defend the position of the President, the Democratic leadership in the Congress, and their supporters in the media.
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