Bruce Walker * American Thinker
Punditry is in a fit. The federal government is headed for a fiscal cliff. What can we do? What should we do?
Conservatives have some clear ideas: cut the capital gains tax rate, which will increase revenue; open up all federal laws to energy production, which will also increase revenue without raising tax rates; cut entitlements and federal salaries by five percent; and promise no tax rate hikes, which will reassure our most productive citizens. These steps are not draconian; they will merely get us on the road back to realism. Look at the federal debt clock — don’t just look at the federal debt. Some states, likeCalifornia and Illinois, are in a fiscal death spiral.
As bad as things are here, things are worse in Europe. Fat sow unions in Europe and politicians who herald the umpteenth iteration of a Marxist panacea make nearly all the economic news from Europe bad, and the looming default on sovereign debt by Greece, Spain, Cyprus, and other Eurozone nations means that not just governments, but banks with sovereign debt instruments as significant parts of investment portfolios will lose solvency and confidence.
But the cliff we face and the cliff that Europe faces are less economic than moral. Two decades ago, we won the Cold War. The Iron Curtain fell. America, and to a lesser degree our NATO allies, all were able to safely and substantially cut defense spending. The “Peace Dividend” ought to have allowed Europe and America to keep taxes low, run regular surpluses, and