Now that the election is over, decisively, the Village can get back to it's favorite pastime, hyperventilating over the deficit and "fiscal cliff," the hyperbolically termed expiration of a number of tax cuts and scheduled spending cuts at the end of the year. How much so? Check out this chart reproduced by Business Insider.
As you can see, there's WAY more talk about the Fiscal Cliff than there was at the peak of the debt ceiling!"But, but, but, the CBO!" the deficit peacocks will holler. Yes, the CBO does say.
The debt ceiling standoff really was a threat to plunge the US into the abyss, as a default (which could have happened) would have inflicted untold damage onto the global financial system.
A recession is far less worse, and it's not even guaranteed, and the deadline is far less hard.
if all of that fiscal tightening occurs, real (inflation-adjusted) gross domestic product (GDP) will drop by 0.5 percent in 2013 (as measured by the change from the fourth quarter of 2012 to the fourth quarter of 2013)—reflecting a decline in the first half of the year and renewed growth at a modest pace later in the year. That contraction of the economy will cause employment to decline and the unemployment rate to rise to 9.1 percent in the fourth quarter of 2013.In the fourth quarter of 2013. Not in January of 2013. While Congress "sees rising urgency on the fiscal deal," it's not so urgent that it can't wait until the duly elected new Congress—the representatives the people have chosen to lead them now—are in place in January to deal with it. Take this, from that article:
Senator Olympia J. Snowe, the Maine Republican who will retire at the end of the year, made it clear that she intended to press for a deal to avert the so-called fiscal cliff and get serious on the deficit, lame duck or not.Olympia Snowe bowed out of this whole governing thing months ago when she chose to retire. She's had her chance and now needs to bow out. Let the new team, the one that Americans have just elected, make these decisions. There's absolutely no disaster ready to strike on Jan. 1, and there wouldn't be if Congress took the next seven weeks off. There will be more than enough time to work out deals in January and February.
And a much stronger hand for President Obama if he means it when he says he wants the Bush tax cuts for the wealthy to expire. The most surefire way to make that happen is to just let them die. Then come back negotiate for the rest with them off the table, and with a stronger Senate.
By they way, this is the mandate that Obama and that Democratic Senate have. They were elected on the idea of protecting Medicare, Medicaid, and Social Security and especially on tax fairness. But it's not a mandate if it isn't exercised. Here's their chance.