What is the “fiscal cliff” everyone keeps talking about?

Quick hits again — this is for your reference. There’s so much talk about the “fiscal cliff” that I thought some orientation would be in order.

(1) The actual “cliff” — such as it is — is a supposedly catastrophic set of budget cuts and tax increases. It includes a combo of the expiration of the Bush–Obama Tax Cuts of 2010, the kick-in of the forced “sequester” of budget funds, plus anything else they can cram in, like the extension of the debt ceiling, the deadline for which kicks in somewhen in 2013. They (the NeoLibs and MoveCons working together) will make this as complex as possible, so you can enjoy the “win” — pennies from billionaire heaven — and forget the losses — reduction of the safety net forever.

For more on what’s involved in the sequester, see this Yahoo explanation. Ignore the early-paragraph pimping of the badness and scan down for the detail.

(2) The name — The idea of a cliff is something you don’t want to go over. Keep that in mind; the fiscal cliff is a “very bad thing” according to deficit hawks.

(3) The plan — The fiscal cliff was designed by deficit hawks to force big reductions to the federal budget that they thought were needed.

cliff

Cliff via Shutterstock

You read me right. Read those last two paragraphs again, (2) and (3). Note the contradiction? Deficit hawks designed the combo of deadlines and sequesters, then want you to run screaming from it. Why would a serious deficit hawk run screaming from forced deficit reduction?

Answer: There are no serious deficit hawks in Washington; just serious safety net killers. The “fiscal cliff” wasn’t designed to force budget changes. It was designed to force scary budget changes as a cover for safety net reductions.

Paul Krugman has also noticed the contradiction and has more. Do click and read. Here’s a taste (my emphasis throughout):

The fiscal cliff poses an interesting problem for self-styled deficit hawks. They’ve been going on and on about how the deficit is a terrible thing; now they’re confronted with the possibility of a large reduction in the deficit, and have to find a way to say that this is a bad thing.

Here’s more from James Fallows, furrowing the same ground (h/t digby):

That the looming debt and deficit crisis is fake is something that, by now, even the most dim member of Congress must know. The combination of hysterical rhetoric, small armies of lobbyists and pundits, and the proliferation of billionaire-backed front groups with names like the “Committee for a Responsible Federal Budget” is not a novelty in Washington. It happens whenever Big Money wants something badly enough.

Big Money has been gunning for Social Security, Medicare and Medicaid for decades – since the beginning of Social Security in 1935. The motives are partly financial: As one scholar once put it to me, the payroll tax is the “Mississippi of cash flows.” Anything that diverts part of it into private funds and insurance premiums is a meal ticket for the elite of the predator state.

The “elite of the predator state” — couldn’t have characterized Our Betters any better myself.

Yours in good information,

GP

To follow or send links: @Gaius_Publius


Gaius Publius is a professional writer living on the West Coast of the United States.

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