Are you tired of the bullshit surrounding the hysteria of the “fiscal cliff?” I am. America, by and large, is unwilling to grow up and face some hard facts.

First, where are we spending our Federal dollars:

In 2011, we spent 3.603 trillion. Almost 70% of that amount was spent on Pensions, Healthcare and Defense. If you add in the amount spent on “Welfare,” the number jumps to 82%.

The deficit for 2011 was 1.3 trillion (1.299.6 to be precise).

Spending is out of control and the biggest offenders are pensions, healthcare, defense and welfare. Defense and Welfare expenditures have increased the most over the last four years.

So, can we fix the problem simply by raising taxes?


The best summary of the tax situation is at Business Insider.

They provide some pretty damning and informative charts.

Enough of the bullshit that, “the rich are not paying their fair share.”

We can keep taking money from the “rich,” but that won’t fix the spending problem.

And what happens if we go ahead and raise taxes on the rich? They will survive. But they will spend less money in the non-government part of the economy. That will dampen economic growth, not spur it.

Warren Buffett has been especially disingenuous touting the benefits of the wealthy paying more taxes. Daniel Shuchman in Forbes tears Buffett a new asshole using Buffet’s own words.

The so-called Oracle of Omaha begins by making the manifestly absurd assertion that tax rates do not influence investment behavior. Astonishingly, he claims that when he was a fund manager, “never did anyone mention taxes as a reason to forgo an investment opportunity….” “Only in Grover Norquist’s imagination,” Buffett derisively contends, do investors adjust their plans based on the prospects for taxation. Such statements defy economic logic. The amount and nature of taxation, whether of the income stream generated by a particular investment, or that levied on interim dividends or capital gains realized upon the disposition of an asset, must be among the many complex factors considered by any rational investor in assessing the relative merits of an investment opportunity. If this proposition is not self-evident to you, you can go straight to the authority himself.

Buffett has left extensive and contemporaneous documentation of his investment thinking going back five decades. And it is clear not only that he has always understood this fundamental economic axiom, but that tax considerations have been a critical animating factor throughout his business career. (Indeed, during the period when he was initially accumulating great wealth, Buffett was quite passionate about the desirability of low tax rates.) As early as 1963, he wrote a letter to the investors in his hedge fund, The Buffett Partnership, Ltd., in which he laid out some of the fundamental tenets of his investment philosophy as it relates to taxation. One was the following:

“I am an outspoken advocate of paying large amounts of income taxes – at low rates.”

What do we do? For starters, Republicans should propose cutting defense by 20%. All other Government programs should be held at 2008 levels. Federal Government employees should have their wages frozen. And Senior Executives (i.e., those who are Senior Executive Service and General Officers) should accept a 10% pay cut. That would be a start.

What do you think?

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Larry C. Johnson is a former analyst at the U.S. Central Intelligence Agency, who moved subsequently in 1989 to the U.S. Department of State, where he served four years as the deputy director for transportation security, antiterrorism assistance training, and special operations in the State Department's Office of Counterterrorism. He left government service in October 1993 and set up a consulting business. He currently is the co-owner and CEO of BERG Associates, LLC (Business Exposure Reduction Group) and is an expert in the fields of terrorism, aviation security, and crisis and risk management, and money laundering investigations. Johnson is the founder and main author of No Quarter, a weblog that addresses issues of terrorism and intelligence and politics. NoQuarterUSA was nominated as Best Political Blog of 2008.