The fiscal cliff is overrated by some measures. It’s just the beginning, by others.
The economy won’t cease to exist if the cliff is breached. However, prospects for a long-term recovery – and the political system’s ability to institute positive change – are in doubt.
Regardless of whether a last-minute deal is reached to avoid the worst tax hikes and spending cuts, the impact of the fiscal cliff will be felt well into 2013.
Most likely, a compromise will be reached soon, if only to put off the inevitable. But the tone has been set for the new year, and possibly for the next four.
The plunge over the fiscal cliff may not result in drastic economic decline, especially if the situation is rectified quickly, yet it is a symptom of a bigger problem.
Call if dysfunctional or call it just plain broken, Washington is apparently incapable of even the smallest legislative moves that involve compromise.
Hopes of a grand bargain on long-term American fiscal policy, involving entitlement spending, tax rates, and the debt ceiling, totally disappeared weeks ago.
All that’s left are fading possibilities involving the delaying portions of tax increases and restoring some planned cuts, with long-term problems lingering.
Those are moves that actually make the deficit outlook worse.
More saliently, they should be the politically easy things to get done, yet Congress is paralyzed and the president appears powerless to do anything meaningful to prod action.
Other items on President Barack Obama’s second-term agenda – immigration reform, environmental policy, infrastructure investments, gun control – look like dreams now.
Blame whomever you choose, but the simple fact is that Washington is now broken beyond the point where bold individual leadership can even fix it.
The forces at play are bigger than the ability of the president, Harry Reid and John Boehner, or any other person or persons to turn them around.
The “fiscal cliff” metaphor suggests a jump into a void, but at least one that has a bottom. Too bad the depth of where we are headed has yet to be determined.