How Far Will You Fall Over The Fiscal Cliff?

If agreement talks between Congress and Barack Obama continue to be unproductive, just how far will you and your family fall as we go over the fiscal cliff?

Before I answer that, we must come face to face with the fact that the fiscal cliff is a moral issue, not just an economic or political issue.

First, ask yourself about the concept of “your fair share” of taxes. Just what is that? Then think about how we’ve been separated into classes of people according to how much money we have. Now combine that with the fact that different people that make different amounts of money are then taxed differently. That doesn’t sound too “fair” to me. Does it to you? There is nothing fair about the current tax system.

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In a piece by Dr. Gary North, for The Freeman, he writes:

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In the eighth century B.C., the prophet Isaiah warned the nation of Judah: “How the faithful city has become an harlot! It was full of justice; righteousness lodged in it; but now murderers. Your silver has become dross, your wine mixed with water: Your princes are rebellious, and companions of thieves; every one loves bribes, and follows after rewards. They do not defend the fatherless, nor does the cause of the widow come before them” (Isaiah 1:21-23). But he did not lay the blame solely on the rulers; he laid it on the whole nation: “Alas, sinful nation, a people laden with iniquity, a brood of evildoers, children who are corrupters! They have forsaken the LORD, they have provoked to anger the Holy One of Israel, they are turned away backward” (Isaiah 1:4).

Isaiah recognized that the rulers were representatives of the people. The rulers did evil things because the people in their own lives were also doing evil things. This is not to say that all the people were guilty of rebellion. The prophet Elijah was told that a remnant still existed in Israel: a small group of seven thousand people who had not bowed to Baal (1 Kings 19:18). But the majority of the nation was involved in rebellion. Their political institutions had not preserved the nation from evil.

Friedrich Hayek wrote in 1944 in The Road to Serfdom that in a political order that promotes compulsory wealth transfers, the worst people will rise to the top. The lure of power increases when power is concentrated at the top. The ruthlessness required to rise to power in such a power-driven political order will ensure that the worst get on top. He wrote this in the era of Adolf Hitler and Joseph Stalin.

Hayek’s critics denied his argument. They denied that it was socialism as such that allowed Hitler and Stalin to come to power. They insisted that other factors must have been involved. But from 1944 to the fall of the Soviet Union in 1991, the worst kept rising to the top in the countries with the most centralized economies.

Hayek blamed the economic system: socialism. The West’s socialists blamed the political system: anti-democracy. The Communists blamed counter-revolutionary forces: saboteurs. But almost nobody blamed the people who lived under tyranny.

Long before Lenin appeared on the scene, European intellectuals and politicians had accepted the economic premise of Communism: the need to establish a state that would redistribute wealth from the rich to the poor. It was not some raving liberal or radical who created the modern system of compulsory welfare; it was the conservative German politician, Otto von Bismarck, who did so in the late 1870s. The common people rejoiced, just as Bismarck knew they would. Even today in Germany there are millions of common workers who still believe that Communism at least protected them and their jobs, despite their long-term poverty. The ideal of the welfare state still is dominant in the one society that experienced the nightmare of both National Socialism and International Socialism: Germany.
The Politics of “Fair Shares”

When a politician speaks of everyone paying his fair share of taxes, he always means the rich should pay a higher percentage of income than the poor. Meanwhile, politicians offer to the middle class—the eligible voters who actually vote—their fair share of the loot that will be stolen from others by means of the ballot box. Almost no one questions the legitimacy of using the ballot box to confiscate the wealth of others. The debate centers around who should pay their fair share “someone else”—and those who will collect their fair share: “us.”

What is our part in all of this? After all, our representatives are a reflection of us, and I mean that in a collective sense. Many of us oppose what our representatives do, but they got elected somehow. People voted for them.

North proposes a question that never comes up during talks on debt, taxes and everyone’s “fair share.”

What will be everyone’s fair share of judgement when the political theft process produces economic disaster and political revolution?

There is always the assumption that the current people in political power can kick the can down the road long enough to avert the crisis until the next election. The assumption is that the bill will come due later rather than sooner and that someone else will have to pay them, but the bill eventually does come and someone will have to pay.

We the people have allowed this class warfare. We the people have allowed men to take office who have been irresponsible with the public’s money and the public’s trust. We have allowed them to take from those that produce and give to those that don’t. We have allowed the creation of the welfare state and reckless spending to take place without accountability. Ultimately we have allowed others to be taxed at a greater rate so that our taxes would be smaller and we have called it “fair.” It isn’t. Am I calling for higher taxes? No way. But I am calling for whatever taxes are collected to be fair and I am calling for serious cuts to wasteful spending, including the welfare state and accountability.

Does this mean there is no responsibility on the part of our representatives? Absolutely not. As North began his article, he wrote:

Daniel Patrick Moynihan, U.S. Senator from New York and former Harvard professor, has told the press not to blame Congress for spending too much money, since “we can’t do anything about it.”

Don’t blame those who are leading the nation into a debt disaster? Don’t blame them because they cannot stop themselves? Senator Moynihan may have been indulging in verbal playfulness—enhancing his reputation for being a kind of mischievous Irish leprechaun. What he is saying, however, is that those who pass the legislation should not be held politically accountable. Because the voters continue to return these people to office, it appears that the voters agree. Worse, it appears that the voters want more of the same. They may say that they want Congress to stop spending in general, but they are not willing to say that Congress should stop specifically. If voters will not vote in terms of the need to stop spending specifically, their call to stop spending generally has no teeth in it—no political sanctions. The politicians respond only to political rewards and threats. There are no great rewards for spending less on specific projects. On the contrary, there are penalties. The politicians vote accordingly: more spending on specific projects.

The bills are coming due and unless a different scenario comes into view, they will come due on us.

So that you can take a look at just how the fiscal cliff issue will affect you and your family in the coming year, should Obama and the Democrats get their way by increasing taxes by $1.6 trillion, there is a calculator that can help you in determining just how far you will fall over the fiscal cliff.

Once you take a look at the increase in your taxes, I ask you, “Is your share fair?”

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