On the surface the “fiscal cliff” debate is all about the federal deficit. But the reality behind the talk is the weakness of the economy. In its current state it can neither generate anything approaching full employment, nor provide the tax revenue needed to support the basic functions of government. In fact the size of the national debt is not the issue. In the five years from 1940 to 1945 the U.S government drove the debt from 50% Read More …
The “fiscal cliff” idea stems from one simple fact: the U.S. economy is too weak to support the revenue needs of the government, leading to ever increasing deficits. At some point in this sequence the dollar will crash or the government default on its obligations. Either would be a disaster. Hence the talk of drastic increases in taxes coupled with huge cuts in spending. Given the power and influence of the interest groups concerned, such measures might in Read More …
With the election over and done the new matter at hand is the “fiscal cliff” – a dire menace now facing the nation. As in all cases where the media whip up excitement or panic one must distinguish between packaging and content. So let us address the packaging first: The issue of raising the national debt ceiling surfaced at a most inconvenient time – just as the election campaign was getting into high gear. Neither the administration nor Read More …