Some magic acts are fun to watch, others make you cry. One such act is the current fiscal cliff debate.
Please stop looking where these magicians are pointing. They’re hyperventilating about a few tens of trillions of dollars, an incredibly large number, which they can’t pay even with large tax increases.
Among other things, they’re talking about federalizing retirement accounts and taxing Roth IRA capital gains. They want to make the problem look like it might be solvable if you let them change the laws enough. It’s not.
The Congressional Budget Office optimistically estimated the (long-term) fiscal gap at $222 trillion. This doesn’t include the likely hundreds of trillions in guarantees the United States has issued to encourage junk investments or to keep them from immediately collapsing (mortgage pools, pension fund guarantees, foreign debt).
Put the pressure on to accurately report on these government-sponsored frauds. Don’t accept being treated like mushrooms.
William M. Smith
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