I have no illusion that this screed will influence anyone or anything, but in the wake of the November 6th election I feel the need to offer alternatives to the otherwise inevitable wrecking of the legislative and executive branch vehicles on the immovable edifice that is reality.
Ben Bernanke coined the term “massive fiscal cliff” in February, and since then the specter of economic disaster has set this country’s economic discourse into how to “avoid it.” Derek Thompson this afternoon dubbed the revenue increases from expiring tax cuts dating from 2001, 2003, and 2010 and the spending cuts instituted to occur simultaneously in the “agreement” to raise the debt ceiling last year a “fiscal fast.” Tax increases and spending cuts–doesn’t the English language have a single word that describes this policy? A word that sounds like an antonym for prosperity? It’s curious to me people feel the need to create new terms and euphemisms when we already have the perfect term. Hell, we already have several full-scale current case studies: on January 1, 2013 the United States of America will be subjected to a full dose of Greek and/or Spanish-style austerity.
This last election showed that an American president other than FDR can be reelected with the unemployment rate at 7.9%. This is what Greece and Spain experienced since the formation of the Eurozone:
Both officially have greater than 25% unemployment. I will explore the European calamity in another post, but safe to say austerity is a recipe for turning a growing economy into recession (or a depression–the U.S. in the 1930s never crossed the 25% unemployment threshold).
The current discourse about how to avoid the “cliff” centers around whether the Senate or House of Representatives will ever accept higher tax rates (the headlines of course mention only tax rates for the rich, but the current House composition has a majority that treats the 16th amendment as satanical). There is a significant dearth of voices that seem to have any concern that the “cliff” is a full turn toward American austerity on the federal level: Paul Krugman, the loudest voice against the push toward European-style austerity, fails to mention anything about its perils in his latest column. I feel my voice is too faint to have any effect, but if no one else will rail against austerity, I WILL.
Before this post gets too depressing, I’ll list options and solutions next.