The Fiscal Cliff/Slope/Curb: Brinkmanship to the Max

With the exception of  occasional pecks at the keyboard,  I'm just sitting here in a local coffeehouse,  cradling my head in my hands.   I'm still trying to make sense of this whole chain of events  that brought us to this point,  this fiscal game of chicken.

Back in 2010,  instead of focusing on the still-foundering economy,  many  in Congress were  agonizing over the deficit.  (Progressive economists such as Paul Krugman and Robert Reich,   suggested that Congress's  priorities defied common sense.   They instead believed that fixing the economy should come first.   The emphasis should be on human needs:  getting folks back to work and remediating housing woes.  Then  address the deficit and the national debt).

So,  in the wake of some convoluted wrangling,  the Simpson-Bowles Commission was established.   But its proposals were so draconian that they'd have never gained traction on either side of the aisle, let alone  with voters. 

Ultimately,   after some tweaking by the commission,  an alternative bill was presented to the House where it was soundly defeated.  (It was actually a budget resolution based in part on the Simpson-Bowles proposal,  which in its entirety was never voted upon).

In the meantime,  well into 2011,  the nation once again approached its debt limit.    Historically,  the debt limit had been raised routinely,  often many times a year without a fuss.   This time around,  congressional Republicans decided to use this normally routine act as a means to extort concessions from the Democrats.  (Not raising the debt ceiling would have had grave consequences across the planet as well as nationally and locally;  essentially sovereign default).   

So,  in response, despite the fact that the economy was still sputtering,  Congress passed The Budget Control Act of 2011.   A joint committee  of 12 members,   was created:   six congressmen and six senators,  each body appointing three members from each party.   They were expected to find ways to cut over $100 billion a year over a period of ten years with a combination of revenue increases and spending cuts.   This task was to be accomplished by the end of 2012;   otherwise,  the terms of the Budget Control Act  would kick in automatically.  (While not as draconian as Simpson-Bowles,  there's still plenty of nasty stuff to make everyone unhappy).   Well,  assuming no progress before the calendar year flips,  that's about to happen.

So,  what we're facing is this:   automatic tax increases across the board,   expiration of extended unemployment benefits,  and deep cuts in vital domestic programs,  as well as the military budget.   Ben Bernanke,  the Federal Reserve Chairman,  coined the term "fiscal cliff" (as in "going over the fiscal cliff")  to describe this situation.   But since many of the provisions would be phased in gradually,  other observers prefer to use the terms "fiscal slope"  or "fiscal curb".

Here's what might appear to be the most optimistic scenario:  the draconian provisions of the Budget Control Act will all kick in;  then Congress will go into action.   Many,  if not all of the most dire measures will be blunted.   That way our members of Congress can portray themselves as knights in shining armor coming to our rescue.

But what they'll really be doing is cleaning up the mess that they themselves have made.   So congressfolks,  how about making some  New Year's resolutions?   Consider us human beings who do most of the  living and dying out beyond the Beltway. 

Get to work!

Happy 2013.