Praying for the Fiscal Cliff

I think that the chart on the right will explain why I hope for a fiscal cliff. If we go off the cliff, the US government deficit goes down a lot. If you want more information, you can read about it on Wikipedia. 

While the fiscal cliff will not solve all our fiscal issues, it will solve many of them. The main issue I have is that next year’s estate tax will force many family farms and business to be sold to pay the death tax. I do not think the world will come to an end if the tax structure reverts to what it was 10 years ago, plus an additional  3% increase in the tax rate if you have a large capital gain. We have to take our collective medicine. Yes it will taste bad—no cherry flavoring for us! The automatic spending cuts associated with the "cliff" may be the only way to actually "cut" spending. (Remember that there are in fact no cuts, just a decrease in planned increases.) 

We will still need to reform Social Security. This will be relatively easy. A modest change to a cost of living calculation from the current wage increase method to determine the cost of living increase is needed. This is rather arcane, but the bottom line is a smaller increase in the increase of the social security checks every year. We can also gradually raise the retirement age more than the current law does, and we move the coming Social Security bankruptcy from 20 years from now to 50 years from now. 

Not the medical dog I have in mind.No doubt there will be some sort of deal next year to snatch defeat from the jaws of victory, but until this happens I have switched from guardedly pessimistic to guardedly optimistic. I expect I will switch back next year. 

The main issue that will dog the US until it is solved is the US medical system. It has reached the point that for me, I have more confidence in the Russian medical system than the US system. The system is so bad that a single payer system would be better. I do not think this is by design. Never underestimate the power of stupidity. I would prefer a free market approach, but that seems unlikely. 

So get out of debt, and pray that Obama and Boehner will not come to an agreement.