Fiscal cliff - what the hell is that animal?

[mahnmut.livejournal.com]

Okay, I'm not American. So please be so kind to educate me. What's this fiscal cliff monster, news of which have trickled down even here to the ass of the world, and which everybody in America seems to be so worked up about? It's the new big story, now that the election is over.

I did some research (haha! Tbh, I did most of my learning from Jon Stewart - shoot me!), and what I could gather from all that, was the following. Feel free to interrupt me and correct me where I'm wrong.

So, the way I'm reading it, first of all this fiscal cliff thingy doesn't have much to do with the debt ceiling. Contrary to what I initially imagined. Also, it looks like this monster is even totally misnamed. Fiscally, from the deficit's POV, going over the cliff and plunging into the river... lake... mud... whatever there is at the imaginary bottom, might actually not be such a bad thing. From a strictly fiscal POV, anyway.

Now, the one thing I think I got right about the whole story is that the fiscal cliff simply means that, if no Congress action is made by January 1, all Bush tax cuts would expire and you guys would go back to Clinton-era tax levels. THE MAYANS WERE RIGHT!!! Also, the automatic spending cuts on many federal programs (including the military! God forbid, teh terriztz R coming!), would kick in. Automatically. So, going over the cliff would mean taxes would go up for everybody and spending would be cut drastically, shrinking the deficit significantly.

Further, plunging off the cliff and into the deep would actually force the Republicans in Congress to seriously consider starting to negotiate with Democrats about deficit reduction, taxes, spending, and all that fancy jazz. Numbers will be tossed. Passions will boil. Dogs sleeping with cats, etc. Naturally, the Dems would want to reduce taxes on everyone earning under $250K, and they won't be trying to increase the taxes on the wealthiest any more, since that'll have already happened (automatically). On the spending side, the Repubs will desperately be trying to restore part of all that military spending which would've been automatically scrapped, and the Dems would be in a position to trade that for some other concessions. OMG, real negotiations! How's that even possible?!?

Cynically, turns out that from a fiscal standpoint, it would seem the best that could happen to the US is if the Congress does nothing for the rest of the year but probably spends its time voting on semantically philosophical declarations on the existential question whether there's a War on Santa. Or something. Not that such a situation would solve the debt crisis in some magical way, anyway. But it'll at least force the two seemingly irreconcilable sides to actually sit on their asses and start talking TO each other, as opposed to AT each other.

But of course, I'm sure this whole fiscal-cliff theater will be solved "in the last minute", just like the debt ceiling fiasco was. TV pundits will fill their 24-hour "news" cycles arguing who the real "winner" was. Meanwhile, the debt counter will keep ticking. Remember: the Mayans were right!

How much of it did I get wrong? 1%? 10%? 50%? 99.9%?

Comments

[htpcl.livejournal.com]

> voting on semantically philosophical declarations on the existential question whether there's a War on Santa

Or, I dunno, maybe voting on arguably redundant legislation on the disabled (http://www.google.com/hostednews/ap/article/ALeqM5iRynQyiQIK9VMiNI013510s9O8AQ?docId=d08cff4ba7db4260a565e94e6be4780f) (UN "dictating" US legislation in an area where relevant US legislation already exists, and all that). The other side: "GOP wants disabled people to stop being such takers (http://www.huffingtonpost.com/2012/12/04/huffpost-hill---gop-wants_n_2240636.html)".

And I thought I live in a funny country.

[telemann.livejournal.com]

People were openly crying in the Senate gallery over the treaty's defeat (including veterans from Iraq and Afghanistan); it was a shameful moment in our country.

On Tuesday night, The Last Word’s Lawrence O’Donnell, who worked for the late Sen. Daniel Patrick Moynihan (http://en.wikipedia.org/wiki/Daniel_Patrick_Moynihan) and served as staff director for the Senate Finance Committee (http://en.wikipedia.org/wiki/United_States_Senate_Committee_on_Finance), seemed to choke up as he shamed Republican senators who turned their back on their former colleague, disabled war hero and 1996 president candidate Bob Dole and voted to block a treaty to protect people with disabilities as Dole watched from his wheelchair on the Senate floor. O’Donnell said:

Having worked in the Senate for seven years, I think the Senate remains a great institution which has done much, much more to be proud of than the rare occurrences that it should be ashamed of. I don’t usually think that when a vote doesn’t go my way in the United States Senate that the Senate should be ashamed of itself…. Bob Dole reached into their hearts and today found … nothing. With one word—no—they failed their old friend. They dishonored themselves and they dishonored the United States Senate.

Video here. (http://www.msnbc.msn.com/id/21134540/vp/50080835#50080835)

[dwer.livejournal.com]

the worry is that it will kill the growing recovery.

Personally, I think Obama should let the law take effect, and then let the GOP vote against a tax cut for the middle class in January, but we'll see. Certainly, by no means should anything resembling SSI, Medicare or Medicaid be up for any negotiation whatsoever.

[a-new-machine.livejournal.com]

Your response is the politician's response. As somebody without a job, I for one am hoping there's a statesman out there willing to do something other than let the economy take the hit to discredit Republicans.

[sophia-sadek.livejournal.com]

And here, I was under the impression that the fiscal cliff was something that Republicans were headed for like lemmings to the sea.

[mahnmut.livejournal.com]

[bailzzararco.livejournal.com]

This explains everything!

[foolsguinea.livejournal.com]

This is great! Fox showed this?

[devil-ad-vocate.livejournal.com]

God, I love that!

[oportet.livejournal.com]

Negotiations, mediations, and compromise could solve every problem - except for the problem of figuring out who really solved the problem.

The recovery is important, but nowhere near as important as who gets credit for it. YOU FOREIGNERS KEEP YER TIE BALLGAMES OVER THERE AWAY FROM AMERICA!

[htpcl.livejournal.com]

> Negotiations, mediations, and compromise could solve every problem - except for the problem of figuring out who really solved the problem.

Dailyquoted,

[rimpala.livejournal.com]

The fiscal cliff...is...um...a thing...

eh, I'm not worried.

[mahnmut.livejournal.com]

But it sounds sooo scary! If they could just rename it to... I don't know, hill?

[anfalicious.livejournal.com]

Your impression is my impression, including that the best thing to do would be to let it happen.

[badlydrawnjeff.livejournal.com]

We actually agree on this, but I think for incredibly different reasons.

[devil-ad-vocate.livejournal.com]

It's actually a case of Republicans hoping the Rapture will come before the cliff.

[stewstewstewdio.livejournal.com]

It's actually a case of Republicans hoping the Rapture will come before the cliff.

Aren't the Mayans promising that on the 21st?

[harry-beast.livejournal.com]

The United States deficit for 2012 is expected to be about 1.1 trillion dollars. The fiscal cliff would reduce it by about half, which sounds like a lot, but it would still leave the United States with half of a trillion dollars in deficit for 2013. The short term shock might be worth it, but only if it is the starting point for a program to bring the United States back into the black.
As for whether the Fiscal Cliff will allow the Democracts to dictate terms, it is hard to say. Given the prospect of another four years of trillion dollar deficits and unsustainable new programs, the Republicans might put their foot down. Or, and this is more likely, both sides, after a suitable period of posturing and false brinkmanship, will agree to delay the decision.

[kylinrouge.livejournal.com]

Given the prospect of another four years of trillion dollar deficits and unsustainable new programs, the Republicans might put their foot down.

lol

[brother-dour.livejournal.com]

The fiscal cliff is basically our version of austerity. The main difference between the fiscal cliff and Greece, for example, is that we might avoid it if Congress does its job... which is a huge if.

[kayjayuu.livejournal.com]

See what happens to you if you go over. (http://interactive.taxfoundation.org/taxcalc/#calculator)

[mahnmut.livejournal.com]

Pretty fancy tool, that.

[peamasii.livejournal.com]

Upon hearing it first I thought of a massive mountain of burning money which then reveals an unending spiral of debt below. Imagine my disappointment when finding out it was a mere political debate over postponing inevitable austerity measures.

[luvdovz.livejournal.com]

From what I've heard, the fiscal cliff is a massive liberal hoax by the lamestream media to lure God-fearing conservatives into Hussein Obama's FEMA death camps. Ann Coulter told me so in an interview for Sean Hannity.

[gunslnger.livejournal.com]

I actually saw that interview (by completely random chance) and I know you're trying to be funny, but she actually said nothing like any of that.

[ofbg.livejournal.com]

"if no Congress action is made by January 1, all Bush tax cuts would expire"

Incorrect. Only the Senate and Prez have failed to act. The House passed a budget for fiscal 2013 on March 19th this year. They did the same thing in 2011 for this year.
http://budget.house.gov/prosperity/factsandsummary.htm

The Senate did not get to vote on it, amend it or even consider it in any way because Harry Reid refused to allow it on the floor for debate.

The normal way of doing things is to debate and amend a bill and then send it to a conference committee with members from both bodies to work out the differences and then pass or reject the compromise in both bodies.

The Senate has not passed a budget for more than three years.

[kylinrouge.livejournal.com]

So you're in favor of filibuster reform, I take it?