Not going to spend anytime trying to explain the decisions of the morons who voted for Obama. If he had an actual record of positive accomplishment, I could buy it. But he does not and, during his first term, proved remarkably uninterested in the task of governing and actually being President.
So now comes the fiscal cliff. In case you’ve been hiding in a cave, here’s the definition and explanation:
“Fiscal cliff” is the popular shorthand term used to describe the conundrum that the U.S. government will face at the end of 2012, when the terms of the Budget Control Act of 2011 are scheduled to go into effect.
Among the laws set to change at midnight on December 31, 2012, are the end of last year’s temporary payroll tax cuts (resulting in a 2% tax increase for workers), the end of certain tax breaks for businesses, shifts in the alternative minimum tax that would take a larger bite, the end of the tax cuts from 2001-2003, and the beginning of taxes related to President Obama’s health care law. At the same time, the spending cuts agreed upon as part of the debt ceiling deal of 2011 will begin to go into effect. According to Barron’s, over 1,000 government programs – including the defense budget and Medicare are in line for “deep, automatic cuts.”
If our national economy was purring along at a 4% growth rate, this cliff might not be so terrifying. But we are not.
The economy is barely growing and the job growth is stagnant (i.e., it is barely keeping pace with population growth). Here’s what you do not know–the defense giants ringing the beltway (actually, the Dulles toll road) are already laying off employees and contractors. At least 1000 have gotten the bad news in the past four weeks. Those layoffs will accelerate in the coming weeks. The Defense contractors are obligated to let people go if they don’t have the guaranteed cash to keep them fully employed.. This will have a cascading effect on business activity in Northern Virginia.
So what will Barky do? He pissed away the last deal. Bob Woodward described that fiasco in detail. But now, he has a chance to redeem himself. Will he? Does he have the smarts to forge a genuine compromise that will win significant Republican support or is he still on his revenge kick?
The Stock market is quite nervous about the likelihood that a deal will collapse and the higher taxes and budget cuts will kick in. That will ensure a major financial crisis. So here is the first test of Obama’s second term–is he a uniter?