the Insiders


December 18, 2012 2:50 PM

Tumbling Over the Cliff

The fiscal cliff is kind of a sham, and everyone should be tired and ashamed of it....

The fiscal cliff is kind of a sham, and everyone should be tired and ashamed of it.

Don't get me wrong. It's definitely a real problem. There are automatic tax increases and cuts to government spending that will kick in next year. And if something's not done, there are good reasons to fear the U.S. will sink back into recession. 

I welcome the recent hints that the White House and Congress are moving talks ahead. 

But let's not forget that this is a problem of Washington's making -- as well as the voting public -- and we can't let ourselves off the hook too quickly. 

Let's recall how we got to this specific impasse. 

Last summer, when the federal government was about to run out of money, Congress put its foot down and said it wouldn't raise the debt ceiling. They were always going to raise the debt ceiling, but they felt the need to put their foot down. (If you'll recall, Standard & Poor's caused a big hubbub by cutting the U.S. credit rating, in part because of the "prolonged controversy" over the debt ceiling.) 

The ultimate deal to raise the debt ceiling was a kick-the-can-down-the-road solution. There was as catch, though. If lawmakers didn't find a way to get the budget in order, a set of draconian budget measures would fall into place on their own. Those measures are what Federal Reserve Chairman Ben S. Bernanke dubbed the fiscal cliff. 

As the economy's barreled toward the cliff, Washington has been waiting for popular pressure to build, hoping to score points with their political base as the other side blinks first. Meanwhile, headlines about how much taxes might go up are sinking in just as consumers gear up for their last-minute holiday shopping. 

The whole thing is a mess. It's not making anybody look good, and it's simply not necessary.

There are serious questions about how much we spend, and on what, and on where we get the money. The deficit needs to be cut, and the U.S. needs to get its spending and fiscal house in order. But the U.S. is also a rich country -- one that has both big needs but also lots of resources -- and its representatives should be able to figure out some sustainable path forward. And they should be able to do it without threatening to drive the economy over a cliff. 

Already, we've fallen down into a chasm of political nonsense.
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