If you listen to or watch any network news program or talk show the term “fiscal cliff” is mentioned so often, it sounds a brain-damaged auctioneer with Tourette’s Syndrome stuck on replay.
Let’s get one thing straight—there is NO fiscal cliff.
The imagery of the horrible “fiscal cliff” metaphor is that somehow the American budget is going to fall into some sort of disaster if something drastic isn’t done to stop it. Not true at all, so one wonders how and why media is so motivated to mislead everyone. Does the general public really believe there is a fiscal cliff looming? If they didn’t, one would suspect that people would sicken of the rhetoric and shut out the media, which would shut down their advertising base and make them behave. But that’s not happening, so let’s explore this further and understand what is really going on.
Since the people we elect to office can never do their jobs and reach consensus on the most important issues, they’ve resorted to punting forward in time. They shirk their responsibility and milk the controversy for more attention later. That’s exactly what is occurring now.
What’s Really Happening
At the end of the year, the budget will automatically take a step toward being balanced due to legislation that Congress passed last year. That’s all. Budget balancing requires spending less and bringing in more, so some taxes will be raised. Americans have had to pay higher taxes during and after every war. That’s the thing about war: it costs a lot of money, and the Iraq/Afghanistan war has been the longest, most expensive war in all of American history. Not only did we not pay higher taxes to support it, we didn’t have to make sacrifices in our personal lives as citizens for the first and second World Wars. The top income tax bracket in 1939 was 75%, which rose to 94% in 1944 and 1945. Back then, housewives went to work in industrial facilities, citizens were asked to donate metal and rubber to the war effort, and households were encouraged to grow victory gardens at home to offset food production needed to support troops. Not only have we done none of that, we’ve seen lower taxes while spending has continued to increase.
Running a deficit year after year is not a good way to run business or government. The deficits are covered with loans tied to government securities, and sometimes with made up (printed) money, which causes inflation (each dollar is worth less over time). The securities are sold to investors, mostly foreign, which hold our debt. Right now, we are paying 40 cents on every tax dollar just to make the interest payments. The higher the federal debt, the more costly the interest. Now America as a country is as upside-down with its creditors as millions of homeowners were when the housing market crashed.
If we were ever dancing at the edge of a fiscal cliff, it would have been in 2011 when the federal deficit was so high high (nearly 15 trillion dollars), it was hitting the limit on how much the federal government was allowed to borrow in a restriction called the “debt ceiling. “ The media more aptly labeled that one the “Debt-Ceiling Crisis,” but if the ceiling had not been lifted, the government would not have been able to borrow money and would have been forced to live within its means, which would have required raising taxes and cutting expenditures. It was all just too much for our poor addle-brained Congress to handle in 2011, so they raised the debt-ceiling on the condition that if no better ideas surfaced they would automatically balance the budget so they wouldn’t have to raise the debt ceiling again in a few years.
So the only crisis of decision facing Congress is doing nothing. How is that a problem? Doing nothing is the absolute best job for government and perhaps the only job our federal officials are qualified for.
It is likely that the Republican and Democratic parties are in collusion to contrive this and many crises. Think about how it serves each side—they both get to whip everyone into a frenzy while getting face time with the press and diverting attention to subjects they want to discuss that have nothing to do with the imagined crisis. If it wasn’t a planned event, one of the two parties would shut it down for being absurd. Instead, each side fans the flames higher, blowing it further out of proportion. A fine trick if you are also trying to distract public attention from other issues that matter, and both sides skin plenty of those herrings in closed board room discussions the public never hears about.
Nobody wants to pay taxes, who in their right mind would? Citizens tolerate it anyway, and don’t really mind when they feel prosperous. Nobody feels that way now, so Americans are generally very upset about paying taxes to a government they feel incredulously wastes their money. Elected officials pick up on that obvious fact, but rather than go after all the pork-barrel projects each member of Congress has conned out of Capitol Hill, they deny the voters what they really want by focusing their attacks on areas they know are controversial enough to generate more free publicity. People are afraid of not having health care, medicare, and Medicaid, so debates centered on such fears are endlessly predictable. Worse, they are not productive.
Bring it On
Fine let’s go with it. But let’s change it to work better for democracy. Let’s rename this the “Stupid Crisis.” We have stupid people, electing other stupid people to do stupid things with a stupid media sponsored by short-sighted advertisers too stupid to see that erasing the foundation of America will not make them money in the long-term. And those who live in Klamath Falls are embroiled in a Stupid Crisis of epic proportions in regard to a mass of stupidity spewing from a City government determined to ruin small businesses, which will eventually lead to a debt crisis as fewer people can afford their homes, increasing the supply in falling demand, reducing the tax base the City needs to stay solvent. By the time they actually udnerstand the nature of their stupid crisis, it will be too late to correct.
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