Making Things Up

When is a cliff not a cliff?  When is a crisis not a crisis?

The answer for both questions is: when politicians make up different definitions for the same term.

The fiscal cliff is not really a cliff. It is fiscal problem, however. But fixing it today or 4 months from now will cost the nation the same amount of money and resources. Timing doesn’t mean much unless you are playing the odds on the stock markets. Stock values will rise and fall based on the same set of baloney feelings and emotions regardless of what is done with the ‘fiscal cliff’. The real money is on value and those investors and stock gurus know it and act accordingly.

Now, back to the fiscal cliff that isn’t.

First, once the dreaded legislation passed two years ago goes into effect because the congressional personnel simply cannot perform their jobs, two things will happen:

a.       Income tax rates will revert to Clinton era rates; that is a hefty increase for everyone. But remember, you don’t pay those taxes until 2014. That gives the politicians even more time to waste in considering alternative solutions. And they will!

b.      Massive spending cuts will occur immediately. This is a good exercise in management. Core functions will always get done; marginal ones will be suspended until someone figures out what the final solutions will be. These cuts will cause pain for those immediately affected and a lot of attention will be spent on changing the cuts and that’s when real compromise will begin.

Second, with the above in operation, congress will finally get the message that they have jobs to do and are responsible for the results. Not the President just because you want voters to blame him when it is you who deserves all the blame.

Third, compromise will occur as voters come down hard on the members of the House and Senate. Republicans will get the full credit for the debacle.

Fourth, once the issues are settled, income taxes will drop back to Bush rates with the sole exception for households earning more than $250,000. Even they will have the lower rates on the first $250,000 of income.

Fifth, spending cuts will be adjusted for the important things and left slashed for those that are not supportable in the final analysis.

There.  You have it. No cliff. No crisis. Just chaos engaged and solved. Through compromise under fire rather than under cool, calm and collected circumstances.  And the Democrats will come out of all of this smelling like a rose. Republicans will be besmirched for another decade as do nothings.

Meanwhile, Barack Obama will enter the history books for calling the bluff of Boehner and McConnell. And the Tea Party. And Sarah Palin and John McCain.

It is a hard victory to win but one that must be done. It is even a harder loss to stomach but one the Republicans crafted all by themselves.

Boomerang anyone? Anyone?

December 7, 2012