Amado Lorenzo
“Not specialized” media has spent lot of space writing about the so called "fiscal cliff" of the EUA. However, only a few understand what really happens and its effect on our economy and daily life.
My friend Luis Baralt sent me an explanation of the reasons that provoked this alarm, which he received from his friend Santiago Ramos.
" A simple and practical example ".
/ ….. Subject: District attorney Cliff " in Plain English " District attorney Cliff " put in to much better perspective.
Lesson Nº 1:
* U.S. Tax revenue: $2,170,000,000,000
* Fed budget: $3,820,000,000,000
* New debt: $1,650,000,000,000
* National debt: $14,271,000,000,000
* Recent budget cuts: $38,500,000,000
Let's now remove 8 zeros and pretend it's to household budget:
* Annual family income: $21,700
* Money the family spent: $38,200
* New debt on the credit card: $16,500
* Outstanding balance sheet on the credit card: $142,710
* Total budget cuts so far: $38.50
Got It?? ....... OK now,
My friend Gerardo Martinez sent the recording of an interview by a French web.
Gerardo indicates, clearly the reasons of the so called fiscal crisis, due to the limits established by the political republican coalition on the national debt, that now approaches 18 trillions of dollars.
Both political coalitions, democrats and republicans do not agree where to reduce expenses. Defence, Medicare or other social expenses?, tax increases and who should pay them.
In accordance with Gerardo´s opinion, the agreement only defers the solution of the problem, which will have to be discuss again next March.
Which is the real problem?
As indicated by Santiago, the problem is that expenses should not be higher than income. If the USA government continues ignoring the signs of alarm, it will have to continue asking the "financial adversaries"; the sovereign Chinese, Arabs and Russian funds to finance the deficit.
And we must not forget the private debt; corporations, individuals and the subsidiaries of our multinationals that export employment creating more and more dependence on foreign funds and not included in the previous numbers.
The Effect
as I indicated in:
The consequences of the debt increase and the deficit will turn us into a financial colony of our competitors and they will demand changing debt by "the crown jewels"; companies, banks and key real estate of our cities.
Do we have solutions?
Yes, there are, but unfortunately, leaders of both party coalitions; democrats and republicans, prevent the implementation of these solutions.
- reduce defence expenses, specially the occupation of foreign countries like Iraq and Afghanistan that provoke deficits and are a source of corruption.
- reduce the fraud, without reducing the services, in Medicare, Medicaid and other social services by means of effective management techniques
- demand big multinationals as Microsoft, Walmart, the car industry, etc a reduction in the export of employment to Asian countries
- implement "antidoping" regulations in the congress, the senate, the BOD of big companies and also media industry (movies, television programs, etc) where drug addicts become famous – a wrong image to our youth. We must stop financing drug trafficking and especially the narcoterrorism that use our additions to attack our citizens and soldiers abroad
- reduce the control that sovereign foreign funds have on key corporations, specially those with "know how" .
We must fight anti-patriotism. It is not a secret that the decrease of the expense in defence and a better management of the social services will produce a decrease of short term employment, but this situation can be avoided with parallel plans investing in "real productive" projects that in medium and long term will generate more quality employment - instead of employments based on military expenses that increase our deficit, debt and corruption.
It is necessary to ask universities, lobbying groups, unions and families to debate on these subjects and demand the politicians to stop playing with our future, our children, grandchildren and justify the salary and other benefits that they receive from our taxes and agree in the implantation of these measures before March.
