Here are some notions on the “fiscal-cliff.”
We all know we are rapidly going broke. Taxing the rich 5 percent won’t do it. You could take all of the money away from rich people and it wouldn’t balance the budget.
This leaves three alternatives: 1. Increase taxes on just about everybody; 2. reduce spending big-time; 3. Go broke by continuing to print money with no backing, as we are presently doing, and let inflation make it easier to pay off the debt with money that is worth less and less.
Of the three, it seems that the most probable is number three, because it doesn’t take the passing of unpopular new laws — just keep “kicking-the-can” down the road.
Hyper-inflation would be a god-send for people who owe money, and those with physical assets like trucks, gold, and real estate. It would be a disaster for those on a “fixed-income,” those with savings accounts, bonds, and those to whom money is owed.
When the dust clears, all of our physical assets and real property will still be here. We, then, can start over. Perhaps we will have to scrap many of our existing privileges and entitlements. It will also take a lot of fortitude to want to be an employer.