If you are considered a sentient life form and live in the United States, you should know about the “looming fiscal cliff”. In order to remain ignorant of the “fiscal cliff”, you would have to work very hard at avoiding any form of media for months on end- starting back in June. Since you are reading this on your computer, I can safely assume you might be aware of the existence of this fiduciary peril. Not many people really understand much beyond the nifty name, however. In order to do any trace amounts of justice to the topic, I’ll have to delve into some history. Try not to disturb the other students with your snoring.
Back in the bad old days (the summer of 2011), the US government was about to hit its Congressionally-set limit on how much money it could borrow. This is known as the “Debt Ceiling”. Historically, whenever the government approaches this limit, Congress harumphs loudly and raises its own credit limit. This is possible because Congress is apparently immune to cause and effect, rational thought, or any possibility of serving the public who hired them. The idea of living within our national means does not seem to have occurred to anyone in Congress, ever.
At any rate, raising the debt ceiling- particularly in the middle of a fiscal year- was never a big deal until the summer of 2011. That was when the opponents of President Obama decided to use what used to be a pro-forma action to get even with him for being insufficiently republican, or something. Despite a couple of centuries of nearly-automatic approval for raising the debt limit, the House of Representatives voted to play “chicken” with the country’s credit rating.
Mind you, a great many people whose business it is to know such things warned repeatedly that playing stupid political games over the country’s ability to borrow money would have consequences. These warnings had no observable effect on the Congress-critters who were dead set on using the issue to punish the president for some imagined transgressions. The credit ratings agencies which decide how much it costs to borrow money weighed in, warning that this sort of partisan dickery would lower the country’s credit rating, but Congress didn’t listen- even after the US credit rating was downgraded. The end result of this political bullshit? Glad you asked. First, it now costs the government more to borrow money, making our financial situation even less secure. Second, Congress decided to pass a law allowing our debt limit to increase if a certain set of conditions were met. The rest of the government agreed to meet those conditions, and the crisis was averted … sort of.
Those “conditions” in exchange for increasing the debt ceiling were pretty basic. First, Congress would have to form a special committee to negotiate budget and spending cuts to avoid such problems in future. This committee would be formed of equal numbers of democrats and republicans, from both Houses of Congress, and they had to come to an agreement by a certain date, or a bunch of extremely painful spending cuts would automatically take effect … more than a year later. If you think that all boils down to merely postponing the problem until after the next General Election, you have a lot of company in that opinion.
To no one’s surprise, the Super-Committee utterly failed to reach any sort of agreement, so- theoretically- a great many budget cuts would automatically take place on January 1st, 2013 (the so-called “Fiscal Cliff”). The problem, of course, is that Congress can always pass a law to nullify the law they passed earlier. The House republicans were confident that they’d win enough additional seats in the House and Senate (and possibly the White House) during the General Election to allow them to merely ignore the spending cuts by Congressional fiat.
Contrary to the optimistic predictions of the republicans, they lost seats in the House and Senate and failed to win the Presidency. The ultra-faux-conservative “Tea Party” wing of the republican party took the brunt of the public ire, which might- theoretically- make it easier for House republicans to compromise with democrats and the White House to avoid the upcoming budget cuts. Early returns are in, and the same problems which prevented the “Super-Committee” from accomplishing anything are still in place. The Speaker of the House is still acting like he’s the one driving the debate, and is unwilling to compromise. The democrats are acting like they were the big winners in the General Election, and are pushing for concessions from the republicans. The People … well, we’re pretty much screwed no matter what happens.
One of the painful budget issues which start on New Year’s Day is the expiration of the “temporary” tax cuts from the previous administration. This means that everyone in the US who earns a paycheck is going to pay more in taxes. One group in the government wants to make those tax cuts permanent. Their opponents want to allow the tax cuts to expire, then re-instate them for everyone making less than $250K per year. Since neither side appears to be willing to budge on this, you can count on paying more in taxes in 2013. It will be mildly painful- basically returning to the tax levels from the end of the Clinton administration- but we, the People, have survived worse. It’s the rest of the slash-and-burn budget cutting which is going to really throw a wrench into the economy’s gears.
Here is the White House description of what is going to happen should the government go over the fiscal cliff. Note that, even in an official White House document, the President can’t resist taking a few partisan jabs at his opponents. Note also that Congress wrote a lot of exemptions into the budget butchery they approved. Things like Congressional perks are in no danger of having to make sacrifices.
Short version (the linked document is almost 400 pages long): Sweeping spending cuts to every single program in the federal budget go into effect on January 1st. These cuts will affect every program, no matter how important. The democrats are facing cuts to social welfare programs like Medicare, and the republicans are facing deep cuts in military programs. Everyone will feel the pain. Congress-critters will face lost jobs in their districts as government and military programs are reduced or eliminated. People on Welfare or Medicare will get less support from the Federal government and the States. Consumer Safety organizations will be forced to curtail inspections of workplaces, factories, and food-production facilities. The military will have to eliminate research and development of weapons systems and procurement of replacement parts. People will lose their jobs. The ripple effects from this sort of draconian budget cutting will slow the economy so badly we may slip back into recession and stay there for a long time. Among other things, our credit rating will take another hit, making it even harder for the government to borrow money.
Why is all this happening? Why is the government risking the lives and livelihoods of millions of Americans on political brinksmanship? The short answer is the fact that our elected representatives are more interested in making political points than in doing the job they were hired to do (running the country, for those of you not paying attention).
Governing in a democracy- or a democratic republic like ours- is dependent upon compromise. Those who we elect to represent us in government are expected to do the work of keeping the country running. This involves providing basic functions which are beyond the ability of individuals, localities, or States to provide. Our elected representatives are expected to debate, negotiate, and compromise as necessary to provide these essential functions and services. Despite that, our elected representatives spend most of their time trying to score points at the expense of their political rivals. The tone of political discourse has grown increasingly combative and strident over the last couple of decades. Both sides demonize the other, and issue public statements claiming that their political rivals are enemies of the people. This is hardly an environment conducive to debate, negotiation, or compromise. Why do they continue with this course of action, which is so profoundly at odds with their actual job?
Because we let them get away with it.
Too many Americans are willing to allow their elected representatives to commit any perfidy so long as they aren’t personally discomfited thereby. So long as they have a few perks of their own, too many Americans have been willing to let the government descend into partisan bickering and gridlock because there was something amusing or titillating on TV. Guess what, Sparky? The free ride is over. Best part? It’s your own damned fault.
So buckle in, everyone. We’re going for a wild ride over a fiscal cliff of our own making. Note that the safety of those buckles cannot be guaranteed, because the government regulators who are supposed to inspect them for quality were laid off. Enjoy the ride!
Current status: Disgusted
Current music: Young Turks by Rod Stewart