Besides breakfast, if there is one thing we can tout as Americans, it’s our knack for a perpetual high-mark in the news cycle. After electoral ecstasy, the hedonist Petraeus scandal, and the endless Gaza conflict, what’s left? Ladies and gentlemen, meet the most harrowing political drama this side of the Potomac: the fiscal cliff.
You guys might remember the “debt ceiling” story. Every year or so, the Republicans would have a hard time dealing with the Democrats in Congress, leaving both parties unable to agree on a “grand bargain” that would reduce our trillion-dollar deficit over the next decade or so. So, instead, they would raise the “debt ceiling” – the maximum amount we can yield in Treasury bonds to borrow money from other countries – and say, “We’ll deal with this shit next year,” pushing us closer to some sort of impending armageddon.
Well, if we’re talking drama here, the fiscal cliff is the Mother of All Debt Ceilings. On New Year’s Eve, Bush Era policies will culminate at midnight in one last red, white and blue self-inflicted implosion that only Dick Cheney can really laugh at. Those tax cuts we stroked ourselves with during the boom-and-bust 2000’s will revert back to pre-2001, Clintonian levels. All income strata will see their taxes go up if we fly off of the edge – the top marginal rate will have to pay the old 39 percent instead of the current 34.5 – and, to really amp up the consequences, there are automatic spending cuts put in place that amount to billions of dollars for thousands of agencies.
To understand what could happen if this shit goes down, here’s a quick historic example that we can use to obsessively tell ourselves, “Everything will be all right.” In 1936, FDR was busy with his New Deal-ing, setting up the safety net and spending his way out of America’s Great Depression. Then, all of a sudden, the conservatives pumped the brakes on Roosevelt – huge spending cuts were made, the Federal Reserve stopped printing money as fast and dazed-and-confused citizens dropped into a deeper level of Dante’s economic Inferno. The 1936-1937 recession saw unemployment skyrocket from 14 percent to 19 percent in little less than a year, leading to economic devastation that arguably delayed America’s recovery from the worst downturn until … now.
Okay, maybe we shouldn’t use that example. Scratch the previous paragraph from your reading memory. It never happened. Let’s move on.
Of course, this saga has its usual suspects to control the plot line. President Obama has promised that he would veto any bargain that keeps the tax cutes for the wealthy intact. And he’s still running his victory lap, fueled off a huge boost of political capital that comes with re-election. In other words, he doesn’t have to care about keeping his job anymore; therefore, he doesn’t have to be “civil” with Republicans anymore.
To use a baseball metaphor, it’s a different ball game now. Obama can use the fiscal cliff to his advantage (“Fine. Don’t bargain with me then let’s see what happens”) or take the bully pulpit route. As David Leonhardt of the New York Times writes, the President needs to show the opposition and the country that he’ll actually let this happen to get his authority across.
House Speaker John Boehner seems intent on keeping those tax and spending cuts in place. According to him, Republicans must stand their ground and stand up for the American people (who, overwhelmingly, are not on the same page as him). But, as of last week, the negotiation meetings have carried a sense of optimism, with both sides acting nice to each other for once. And that’s good because, for the Republicans’ sake, it’s the only damn way they’re going to get re-elected again.
Then again (spoiler alert!) maybe we should fly off the fiscal cliff like the last scene in Thelma and Louise. Whether a part deux of the Great Recession happens or not, it will be a well-needed wake-up call for ourselves. Reality needs to punish us for thinking we could go against history and cut taxes while conducting war in two separate countries; reality needs to punish us for thinking we could be forward-thinking with less revenue; and reality needs to punish us for letting this sort of fiscal behavior go on for ten years of our lives.
We’re Americans. Every once in a while, reality needs to backhand us in the face for doing what we’re doing. It’s alright – we’ll get over it. And then we’ll move onto the next story.