Of the fiscal cliff, that is. There has been much talk lately about the nation facing a fiscal cliff, causing much consternation among investors, business owners and individuals that think this fiscal cliff refers to a major market or economic cliff that we will all be thrown over if the U.S. Congress doesn’t act. Their concern is understandable when you think that our financial future rests in the hands of the members of a Congress that hasn’t been able to agree on much in the past several years.

However, the fiscal cliff that will be reached in a few weeks if Congress doesn’t act is a reference to the large drop in the annual deficit of the United States government and a huge increase in a number of taxes. The thinking is that all of these factors will combine to create a situation that could cause a large recession in 2013 in America much like we are seeing in Europe.

Government spending will shrink by roughly $500 billion in 2013. This sounds great, right? It is until you factor in what this removal of $500 billion from the economy will mean. Simultaneously, taxes will rise for every American, taking even more money out our pockets. This means that there will be less money being spent by both the government and the citizens of America, resulting in a 3.1 percent decrease in the 2013 Gross Domestic Product, or GDP, of America, which will have global ramifications.

On the spending side, cuts to both defense and non-defense parts of the U.S. budget will cause pain and suffering to everyone from the U.S. Navy to the local public school teacher. These cuts were the “compromise” reached last year when the debt ceiling was being debated. The Republicans agreed to raise the debt ceiling if certain “cuts” went into effect after the 2012 elections.

My prediction: the Democrats will cave in on the tax hike issue if tax rates remain the same for all Americans: wealthy, middle class and the poor; and the Republicans will allow spending to continue if defense spending is left alone. The result will be a repeat of the Bush-era budget policies of ultra-low taxes for everyone and continued increases or sustained levels of unaffordable spending. Basically, the 2012 elections will result in keeping taxes the same and spending will continue to outpace the revenue taken in by the government. Aren’t you glad we spent billions on the most recent election to “change America?” (That last statement applies to both parties.)

 

The last bite….

Last week, I had the honor of being one of many volunteers who showed up to serve the senior citizens of St John Parish an early Thanksgiving meal. Several hundred seniors attended and were fed a wonderful meal by Mercy Chefs, a disaster relief food organization. The meal was a bountiful traditional Thanksgiving meal with fresh cranberry sauce! During the many speeches of things to be thankful for, the one that received the most applause was in response to Sheriff Mike Tregre’s announcement that one of the wounded deputies attacked on Aug. 16 was coming home. I give a great meal, heroes returning home and a stronger community 5 (out of 5) crumbs!

Buddy Boe, a resident of Garyville, owns a public relations and program management company and is well known on the local political (and food) scenes. His column appears Wednesdays in L’Observateur.