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Posted by on Nov 24, 2012 in Economy, Featured, Politics | 9 comments

US Worst-Case Scenario: Going Over Fiscal Cliff

US worst-case scenario: going over fiscal cliff (via AFP)

Letting the US economy go over the fiscal cliff would push the United States, and probably other countries, into a new crisis that political leaders now say they are determined to avoid. The fiscal cliff, a combination of mandated tax increases and spending cuts, will occur in January unless President…

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  • epiphyte

    The fiscal cliff is a shock-doctrine ploy of the type which worked when people actually believed the beltway pundits, but which happily seems like a rather flat joke now.
    There’s every sign that the Obama administration is not going to go along with it, but will let the lame-duck session be just that, and start afresh next year with a fiscal landscape free of the burden of the Bush tax cuts which are the biggest remaining contributor to the deficit. At that point, and not until then, we will hopefully be free to chart a course for the economy which is not based on the self-serving, unenlightened, utterly bogus trickle-down theories which have held sway for the last thirty years.

  • Tim_Parker

    By reading comments at the CNN and MSNBC websites I am thoroughly convinced that Obama’s supporters believe his is a messiah and can do no wrong. If there is anything not working (or a problem) with this country (past. present or future) it will always come back to Bush and/or the GOP. Heck, why don’t they go all the way back to Lincoln? Their dogmatic opinions and lack of reasoning are creepy. To steal a page from their book. . . they follow him like the Germans initially followed Hitler.

    I know people in general have perceived far right wing radicals to be beyond reason, a lost cause and downright scary. . . well, as far as I can tell there is no difference in them and the above mentioned.

  • epiphyte

    Tim, If you’re including me in the category of Obama disciples you’re mistaken. In my eyes he not only can, but has done serious wrong on many fronts. For example on civil liberties and drone-attacks/extra-judicial killing his administration has a worse record than Bush/Cheney, which four years ago I would have thought impossible.

    What I will say is that to suggest that advocating a return to the Clinton tax regime, which until a few weeks after George W Bush was sworn in was the least progressive since the 1920s, is “dogmatic”, “creepy” and something that only the kind of fools who were taken in by Hitler would go along with, is utterly, utterly ludicrous.

    That’s it.

  • proftom

    Yes, the fiscal cliff was an artificial creation to delay. The GOP was hoping to gain the White House and then impose their ideas without “interference”. The Dems hoped on keeping the presidency and not sure what their plan was after that other than increase taxes on top 1 or 2%. It was a creation that perhaps they thought was going to help provide incentives for reaching some solution.

    If we are going to be serious about budget deficits, then ALL areas need to be on the table for consideration. This includes changes in social security, military spending and (gasp) tax increases / revenue enhancements. Raise the retirement age in stages. Having worked for a major defense contractor in the past, I know there are lots of opportunities there that won’t hurt national security of “the troops”.

    What we need to avoid is having a Greece scenario imposed on the US. We should learn from what happened in Greece, in that these changes and budget reduction efforts can’t all happen at once in a fragile economy (like the fiscal cliff). The problem in Greece was made worse by imposing those changes all at once, driving their economy down more and making the deficit worse.

  • ShannonLeee

    If I have said it once, I have said it a thousand times. The US is not Greece and the comparisons people make are based in the idea that all countries are the same.
    They are not.

    Greece has two major problems… rich people pay no taxes (corruption) and the euro. Normally, a country that produces so little would not have a currency that holds such value. There is a natural balance in production and currency value that would have kept Greece out of bankruptcy. Sadly, they are now stuck trying to solve Greek problems in an economic curve being set by Germany.

    Greece is more like Mississippi than it is the US.

  • merkin

    The problem is that this is the absolute worst time to get serious about reducing the deficit. The problem we have is the same one that made the Bush recession so bad, private debt and the impact of consumers paying off their debt and reducing aggregate demand. Increasing taxes and reducing federal government spending will further decrease demand, increase private debt and drive the economy back into recession which will further decrease tax revenues and increase the federal government deficit.

    The Republicans, from either malice or stupidity, seem to be intent on driving the country back into recession. The Democrats seem less trilled about it. This might explain the lack of firm plans from the Democrats meant to drive the country back into recession.

    And if you are going to close the budget deficit at this worse of all times to do it, then increasing taxes on the wealthy is the best way to try to do it because the wealthy spend less of their income on consumption and tax increases on them will have less impact on aggregate demand. So while both the parties are wrong the Democrats are the least wrong.

  • zephyr

    from either malice or stupidity


  • adexterc

    I personally would be happy to see us go over the cliff. Sure it will cost me a raise in taxes but it might curb the excessive spending elsewhere (the pentagon?). But keep social security sacrosanct. Even Sen. Durbin says it does not contribute to the deficit. And the solutions offered for the SS issues are ludicrous Raising the age? Supported by a bunch of desk-jockeys who have never worked in a heavy-lifting, noisy, dangerous occupation. In short, folks who have never produced or built, or actually supported the economy with anything other than beautiful thoughts.

  • epiphyte

    “Greece is more like Mississippi than it is the US.”

    Quite. But just don’t ever forget that the republican agenda is to make the US more like Mississippi.

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