I've been watching TV sporadically today but every time I tune in it's yet another voice of doom predicting the end of the world if "the grown-ups" don't come together to save us from the fiscal cliff. These people inevitably also claim that the deficits are killing us and must be fixed --- or it will be the end of the world. Either they don't know that going over the fiscal cliff will go a long way toward closing this deadly deficit they fear so much or they just want to ensure that the deficit is closed on the backs of the poor, the old and the sick. I'll let you decide if these people are really stupid or just selfish and cruel.
In case you needed something to really get your blood pressure up on Christmas Eve, take a look at what "centrist" David Gergen has to say about it:
With time rapidly running out, efforts have collapsed to reach a major agreement on federal spending and taxes before year's end, and both Congress and President are leaving town for the holidays. At best, they will return next week and construct a small bridge over the "fiscal cliff"; at worst, they won't. But who knows?
And that's a big part of the problem -- no one can be confident that our national leaders are still capable of governing responsibly. And in the process, they are putting both our economy and our international reputation at risk.
As the blame game heats up, Republicans are sure to pay the biggest price with the public. It was bad enough that they lost the message fight, letting themselves be painted as protectors of the wealthy. But it was inexcusable when they revolted against House Speaker John Boehner in his search for a way forward: that only reinforced a narrative that the Grand Old Party has fallen hostage to its right wing -- a narrative that already exacted a huge price in the fall elections.
President Obama is certainly not blameless in these financial talks. Early on, he overplayed his hand, alienating rank-and-file Republicans. Like Boehner, he has been more accommodating recently, offering concessions on taxes and entitlement spending that narrowed the negotiating gap between the parties, even as his leftward allies fretted.
Still, Boehner has a point in arguing that what Obama now has on the table comes nowhere close to what the he was advocating in the election season: a ratio of 2.5 dollars in spending cuts to 1.0 dollars in tax increases.
The buck stops on the President's desk, so that ordinarily one would expect him to take the lead in these final days before January 1. For reasons that are still unclear, he instead chose in his press statement late Friday to toss responsibility for negotiations next week into the laps of Congressional leaders.
Brilliant. Yes, it's true that the Republicans are a little bit wacky but that's not the real problem. The roadblock is that the president just has not agreed to hurt enough people for the elite centrist pundit's taste. And that's after the president agreed to throw Social Security on the pyre despite the fact that Social Security contributes nothing to this allegedly deadly deficit.
I am no fan of the Tea Party. But I don't think they are the real problem. They are, after all, doing what their voters want them to do, however ill-advised that might be. No, our real problem is David Gergen and his ilk.
Here's Paul Krugman from earlier today:
[V]ery few of the prophets of fiscal doom have acknowledged the failure of their prophecies to come true so far. And those who have admitted surprise seem more annoyed than chastened. For example, back in 2010 Alan Greenspan — who is, for some reason, still treated as an authority figure — conceded that despite large budget deficits, “inflation and long-term interest rates, the typical symptoms of fiscal excess, have remained remarkably subdued.” But he went on to declare, “This is regrettable, because it is fostering a sense of complacency.” How dare reality not validate my fears!
Regular readers know that I and other economists argued from the beginning that these dire warnings of fiscal catastrophe were all wrong, that budget deficits won’t cause soaring interest rates as long as the economy is depressed — and that the biggest risk to the economy is that we might try to slash the deficit too soon. And surely that point of view has been strongly validated by events.
The key thing we need to understand, however, is that the prophets of fiscal disaster, no matter how respectable they may seem, are at this point effectively members of a doomsday cult. They are emotionally and professionally committed to the belief that fiscal crisis lurks just around the corner, and they will hold to their belief no matter how many corners we turn without encountering that crisis.
So we cannot and will not persuade these people to reconsider their views in the light of the evidence. All we can do is stop paying attention. It’s going to be difficult, because many members of the deficit cult seem highly respectable. But they’ve been hugely, absurdly wrong for years on end, and it’s time to stop taking them seriously.
That goes for the hand-wringing Villagers who love to prescribe painful cuts to vital services while pretending they are among those who will "sacrifice" as well.