12/21/12…The day the world was going to end; however, on that Friday morning, the sun was breaking through dispersing storm clouds; nothing differentiated Friday from any other day. So maybe the world isn’t coming to an end, who knows? However, America has a more realistic issue to deal with: The Fiscal Cliff.

Due to natural, geological characteristics, the movement of earth’s plates allow mountains like Mount Everest to grow an average of 2.4 inches a year, yet, due to counteractive weathering, the mountain really only gains .5 inches annually.  Nature instinctively offsets the growth, and a balance is created – a balance absent in American government.

With nothing to weather down the Congressional spending, the financial deficit has been rising steadily by the billions each day, leaving us a little over 16 trillion dollars in debt. That amount of money is so large that it is virtually incomprehensible to most Americans– what does one do with 16 trillion dollars? There is no way that Congress had previously set the deficit ceiling that high, instead they repetitively raise it as the government incessantly spends beyond budget limits and, even recently, without budget limits.  Needless to say, spending is going out of control and has us on an unsustainable track rapidly approaching economic disaster.  You only have to look to some European countries, such as Greece and Spain, to see the recent and devastating effects of uncontrolled government spending.

For a country that is deep in debt, the New Year brings the promise of new budgets, cuts on spending, higher taxes, and expiration of tax breaks.  In order to erode the towering fiscal cliff, swift action is necessary.  However, some of the planned changes, such as tax hikes, could slow an already fragile economy and present us with our very own economic end of the world.

How does this all really affect us?

Starting with expiring taxes, many of the tax cuts created by the Bush administration will expire – tax cuts that originally reduced income and investment tax rates, diminished the estate tax, and increased breaks for middle- and low-income families. Not only would Congress shrink deductions, but they would also attempt to generate revenue with new taxes beginning in 2013, mainly in response to the Affordable Health Care Act.  This includes supplementary taxes such as a 3.8% Medicare income tax and an additional 0.09% Medicare Hospital Insurance tax. Sure, these percentages seem low, but they do add up. For a working dad with a $200,000 salary and three kids, his pay check due to the new taxes on Medicare and the deduction on Child Tax Credit, alone, is effectively reduced by $8,000. When paired with an increasing 33% income tax, a $200,000 mortgage, and daily expenses, the combined effect makes this dad’s hard earned pay seem not nearly as rewarding.

In addition to the new taxes, spending cuts are also an area of intense negotiation between Congressional leaders and the President.  Significant cuts could mean things like the defense sector will greatly suffer.  Unemployment aid will decrease and Social Security eligibility will rise. Ultimately, many economists are anticipating a domino effect back into recession for the U.S. Is that worth it for an estimated $7 trillion decrease to the national debt? Can America handle another recession?

Due to the previous recession and the overwhelming unemployment rate that resulted, America needs economic recovery balanced with fiscal sustainability. Government plans seem ideal in reducing the deficit, but are they realistic? Can America keep up with it? The best intent is there, but sometimes the best intentions can lead to unintended and undesirable consequences. Setting ourselves up for failure with unrealistic expectations can lead to devastation and possibly even an economic depression. Plus, with seemingly unfettered corruption and waste associated with so many government sectors and programs, what ensures that the money is being used properly?

It would seem that weeding out the ridiculous amount of waste the government spends more important rather than shaving some dollars off here, increasing the tax percent there.  So wait – our tax dollars are going where?   In 2006, the Federal Government was ready to allot $500,000 for construction of a tea pot museum in North Carolina. This year, $750,000 was provided for a new soccer field for detainees held at Guantanamo Bay and $200,000 was spent on a tattoo removal program in Mission Hills, California.

There’s no doubt that these are not the only incidents of useless spending. The federal government needs to take care of this, and really make an effort to focus on the necessities. There is no time or money to be dealing with such ridiculous and wasteful pet projects.  Most importantly, the public needs to become informed about the laws our elected representatives are passing to tax us, spend our tax dollars, and regulate how we live.  Our representation in Congress needs to be taken seriously for the benefit of the country and only we can make sure that happens by being informed and engaged.