Senator Mike Lee of Utah gets it. I just read an article where he talks about the fiscal cliff we supposedly avoided. He was one of only eight senators who voted against the fiscal cliff deal, and he gives his reasons. And then he talks about the coming fiscal avalanche.
The “fiscal cliff” was a crisis created by Congress, and it is by no means solved with the deal that was struck. On this blog, I called it not a fiscal cliff but a fiscal pothole, compared to the real crisis that was coming.
I like Senator Lee’s terminology explaining the coming crisis as a fiscal avalanche. When the snow is stacked high, we’re at risk of having an avalanche. We don’t know the moment when the avalanche will occur, but we know, from the volume of the snow, that it’s going to be bad. This is where our country sits, financially. When people become less willing to lend money to the federal government that will push up the interest that the government has to pay. Those interest payments will then escalate and we will be caught in a vicious cycle as the government becomes less and less able to pay that debt and we are required to borrow more and more. Taxes won’t be able to be increased enough to manage the expenditures, either, because taxes that high will destroy the economy.
Senator Lee gives his opinion that this crisis is anywhere from two to eight years down the road. Like an avalanche, it is hard to predict exactly when it will occur. We just know that conditions are such that it is likely.
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