OVER THE FISCAL CLIFF WE GO

By now you should have all heard about the “fiscal cliff” and how we are about to plunge over it, if Congress does not act by around Christmastime. Lots of luck with that. The fiscal cliff came into being in August 2011. The voters, in their infinite wisdom during the November 2010 elections, elected  a Democratic majority in the Senate, but a Republican majority in the House of Representatives. Most of the newly elected House members were Tea Party stalwarts, with a supposed mandate to sharply reduce Government spending by cutting the budget. Then, in July of 2011, a piece of legislative idiocy known as the debt-ceiling had to be raised in order for the Government to go on functioning. The debt-ceiling, which is not stipulated anywhere in the Constitution, mandates that the Government cannot borrow anymore money above an amount previously designated by Congress, unless Congress passes a new law designating an increased amount of debt. I know that this is utter nonsense that attempts to appeal to voters who otherwise are not paying attention to the machinations of the way things get done in Washington, but this nonsense is codified in statute.

So, if any of you haven’t fallen asleep yet, I’ll plow on with more explanation of how Congress functions on the taxpayers dime. Thus, back in July 2011, if the debt-ceiling wasn’t going to be raised on Government spending, where 40 cents out of every dollar spent had to be borrowed, it would have meant that major components of the Government would have to be shut down, and Federal employes sent home with no paycheck. It would have meant missed social security or medicare payments, as well as failure to pay Defense and other Government contractors. It would have meant that if you had payed for a trip to any of our national parks, such as Yellowstone or Yosemite, (over 300 million people visit our national parks every year) you were out-of-luck since park personnel would have been sent home, and the parks closed. You get the picture. But catastrophic or not, House Republicans vowed they would not go along with raising the debt-ceiling unless the Obama administration agreed to drastic cuts in Federal spending to begin January 2013, as well as renewal of the Bush tax cuts through the end of 2012. Otherwise the Government would be shuttered, starting August 2, 2011. Just before midnight on August 1, Obama caved, and agreed to all the Republican demands, and the Government was allowed to stay in business through the end of 2012.

By now, those of you that haven’t fallen asleep are probably propping open your eyelids with toothpicks, but, hey, I didn’t make the rules whereby the Government functions in all its splendor. So now we are in December 2012 and the “fiscal cliff” which sounds a lot better than “congressional stupidity” is about to befall us in just a few weeks. If the Administration and Congress can’t come to an agreement, the Bush tax cuts expire, and taxes go up for nearly everyone. This will be noticed immediately in reduced paychecks due to increased tax withholding. Automatic budget cuts will take effect, including a $50 billion annual cut in Defense spending. This has a lot of  Republicans all upset, since spending on military hardware and troops is the holy grail for conservatives. As if the Defense budget was funded by the money tree that grows in the Pentagon courtyard. Small Defense contractors, heavily concentrated in the Washington DC suburbs of Northern Virginia and Maryland, are claiming that they will have to close their businesses should these Defense cuts be allowed to take place. Other non-Defense contractors are also claiming they will have to reduce payrolls or shutter their companies, causing more unemployment and further weakening an already tepid economy. And so it goes, on and on.

President Obama is willing to reinstate the Bush tax cuts for all Americans, except the wealthiest 2% of the population. For them, (couples earning over $250,000) the marginal tax rates would go up 4.6% on earnings after $250,000. Which is where they were during the Clinton years. Yet Republicans are absolutely not willing to accept 98% of the loaf. They are insisting that it has to be either the entire 100% of the loaf, or no bread at all. After all, doesn’t everyone know that a small marginal tax increase on the richest 2% of Americans will cause an irreparable breach in the very space-time fabric of the universe. A breach that can never be healed and will eventually cause the universe to crumble into a heap of ashes. That, in effect is the Republican position on income taxes, and they’re not budging from it.

The Republicans also want to overhaul social security and medicare to lower their costs, both of which are unquestionably breaking the budget. In this instance, it’s the Republicans that are facing up to reality, and the Democrats that are being irrationally stubborn in refusing to come forward with reform plans that are clearly necessary for those 2 giant entitlement programs. Raising the eligibility age for both programs to 67, and eventually to 70, would make them solvent overnight. And such action would be completely justified because the life span of Americans has significantly increased since these programs were enacted. So there you have it- the GOP won’t budge on on a tax increase for the rich, and the Democrats are just as stubborn on reforming social security and medicare. If both parties hold to their positions we go over the fiscal cliff come January.

Awhile back I wrote a piece on the failures and dysfunctions of democracy, and democratic forms of government in general. I pointed out that Winston Churchill had said that democracy was the worst form of government, (except for all the others that have ever been tried.) And now with this extreme polarization among the ruling parties in this country, dysfunction has never been more clearly highlighted. I believe that members of both parties become highly agitated just at the thought of having to compromise with the other side. Thus, we appear to be stalemated. My feeling is, that at the last minute, some sort of agreement will be reached preventing our plunge over the fiscal cliff. Or not.

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