A Funny Thing Happened On The Way To The Fiscal Cliff

Tyler Durden's picture

Via Mark J. Grant, author of Out of the Box,

“If I've told you once, I've told you a hundred times; do not fan the girls when they're wet! But you'll never learn; you'll be a eunuch all your life.”
                  -Lycus

There are 16 days left before we all shoot over the falls and are plunged into the freezing water. The markets are pretending it will never happen and that some magical incantation will be found to set everything right in the moments before we take the dive. The lethargy is noticeable and the apathy is like someone has thrown the wet towel of complacency over everyone’s shoulders. The crowd meanders. The mob is a headless jumble of people and the clock ticks and ticks and does not stop ticking. The unknown is recognized but like some mindless lemming staring at the cliff I do not think that many understand the gravity of the situation.

Lycus: “Is it contagious?”

Pseudolus: “Have you ever seen a plague that wasn’t?”

In the best case scenario, according to most people, some agreement will be reached. I hate to even agree that this is the best case but this is what almost everyone thinks and so I will go along with it for the moment. This best case scenario however includes an assumption that I do not believe will be correct which is that something formulated by common sense will be the result and it is just there that I hold little hope. To be quite open; I am more frightened of what our political leaders might concoct than what we face at the cliff. The Democrats cry for more stimulus in a time when we cannot afford the stimulus and the social programs we now have but “more money” seems to be the only words in their vocabularies these days. Ok, they can also say “tax the rich” but it is a limited amount of words that they speak now.

It’s against the law of the United States to take one’s own life. The penalty is death.

Obama claims a mandate. Who gave him this mandate one may reasonable ask; the 47.5 million people on food stamps, the people living on the tax benefits of those that work, the people who game the system so that they never have to find a job and enjoy a life paid for by those that are gainfully employed? That is one heck of a mandate isn’t it and yet that is the basis of his claim. Given his “claim to fame” then what is it that we should expect if some agreement is, in fact, reached? Well, boys and girls, it is going to be higher taxes, maybe taxing Municipal Bonds, perhaps some new financial transaction tax, maybe a dividend tax or an income tax on interest received but whatever it is it will be designed to make the people that work and make money poorer. It will be Nottingham and the Sherwood Forest and robbing the rich to give to the poor which is a wonderful fairy tale but hardly a logical plan to run the country or perhaps it is a fine way to run the country if your object is to run it aground.

Pseudolus: “Calm yourself down. I’ll tell you when it is time to panic.”

Miles Gloriosus: “I smell mischief here.”

Pseudolus: “It’s time!”

I am slowly coming to the opinion that the best that can be hoped for is that we do plunge off the cliff. Maybe that will wake up some of the intoxicated with themselves people we now find living in Washington. It also might have a further benefit of waking up the citizens of the country who seem to be traipsing around like nothing is amiss. Nothing is amiss, of course, just ask Nancy Pelosi who will tell you that it is now “a ms.” The other problem is that our politicians are secretly whispering in the corridors. They have convinced themselves that even if we do go off the cliff that there is a tourist stop about half way down where they can stop and ask for directions. It has gotten so bad now in Washington D.C. that recently when one of our Democratic Congressmen announced that his wife was going into labor that the response from the floor was “well, some people have to work.”

Pseudolus: “A common courtesan in the house of Lycus?”

Hero: “Is that bad?”

Pseudolus: “There is no way to make it sound like an achievement.”

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fips_OnTheSpot's picture

Isnt it last day in congress calendar today anyway?

derek_vineyard's picture

the calander has 365.25 spaces stamped as flex days  (vacation, go to washington if feel like it, vote if feel like it, get on knees for press-mandatory,but who needs to be forced?)

Vashta Nerada's picture

Just for the record, Robin Hood didn't steal from the rich and give to the poor.

He stole from the tax collector, and returned the money to the taxpayers.

knukles's picture

Here here....
I say what-ho, over the cliff we go!
Bloody well only way to get spending cut, mates!

(unicorn time!)

eclectic syncretist's picture

We will go over the cliff because the FedGov needs to preserve the illusion that Federal Reserve Notes are money, and for no other reason.

It will allow the FedGov to make some lying piece of shit statement like "we need the extra revenues to balance spending", when the truth is they can print all the debt (Federal Reserve Notes) they want, and even with higher taxes they will continue to spend way more than they take back in until the illusion is eventually shattered.  Higher taxes is just a stalling tactic.  Gotta keep the geurnsey making milk as long as possible.....

rotagen's picture

Like everything else in our fake economy, the "fiscal cliff" is just a chapter in a fairy tale, making this commentary quite useless.

GMadScientist's picture

Compromise == tax cut for everyone, no meaningful spending cuts, and deficits as far as the eye can see.

Every crony wins!

spastic_colon's picture

indeed....obummer was "mandated" by himself with the ACA, gotta pay for it and then some.  Plus any resolution will be all handshakes and photo ops but revenue neutral and all the career politicians keep their jobs.  Besides, most people only read headlines, which is politically perfect as long as it is the "majority" of people.

Peter Pan's picture

The fiscal cliff is not the end of the road. As long as the international community accepts the US as payment for goods, services and in particular oil, the USA will act with impunity. However the grim reaper approaches. First with currency agreements between various countries doing away with the US as a medium of exchange and secondly the curtailment of these countrie's US Treasury purchases. It's a timing thing which will get out of hand when one major nation says "no more." The question is whether the USA will then cause that nation a great deal of grief as they did with Iraq and Lybia which also did the wrong thing by the US dollar.

NoDebt's picture

Ask around amongst CEOs (especially government contractors).  We went over it a couple months ago for all practical purposes.

I honestly don't know if they're going to get this done.  Seems like they would all be in better negotiating postions if we DID go over.  Then they could lower (some) taxes and raise (ALL) spending back again a few months later (both sides claim victory) and voila!  That's what they call a "win-win" in DC.

Vashta Nerada's picture

I support going over the cliff.  I can't see any other way to enact any sort of spending cuts. 

Seer's picture

" I can't see any other way to enact any sort of spending cuts. "

If that's the objective then you should understand:

1) It's inevitable;

2) It'll mark the end of growth as we've come to know it.

Anyone thinking that we come out some other side picking up pieces just doesn't understand what "economies of scale" have meant.  The Great Unwind is the great unwinding of the growth paradigm, a paradigm that Capitalism is based on.

I don't support anything other than spending my energy on things that I actually have some sense of control over (and in distancing myself from the unsustainable).

Cursive's picture

Land of the lotus eaters.

mayhem_korner's picture

 

 

There are those who think that they were dealt a losing hand,
The cards were stacked against them- they weren't born in lotus-land.

duo's picture

Ahhh, but Obama will have to offset the damage done to the economy from tax increases with more "stimulus".  Of course, the stimulus goes to union jobs, but the tax increase hits the middle class.  Genius.

Seer's picture

Why do I get the impression that no matter where YOU fell you'd be belly-aching...

Seems that the greater money flows have been going to the financial institutions.

But, maybe you're right, all money should go to Apple and FB because they're not government.  (yes, I'm being somewhat sarcastic; it's just that government doesn't have a lock on being fucked up; businesses. whose lobbyists control the government*, hardly differ).

* POTUS is a talking-head, controlled by those lobbyists.  Those that target the figure-head are blind shooters (or Party Pussies).

Element's picture

Nah, the US Housing Recovery surge will save the day ... you'll see!

 

are we there yet's picture

And the jobs go overseas.

Dexter Morgan's picture

 Forward Off the Cliff, Bitchez!

TheSilverJournal's picture

We're already off the cliff, just don't look down. All this "Fiscal Cliff" is a smoke screen to use as a reason to go deeper into debt...but it's the debt that's the problem. Go over the Fiscal Cliff or don't, it matters not.

I wouldn't count on a market sell off either because I wouldn't bet on anything falling faster than the dollar. Now that QE4 is underway, market is going to turn back into the good 'ole "good news is bad news and bad news is good news" as it's going to be all about frontrunning the next boost in QE.

trav777's picture

yeah, remember that gravity comes back on when you hit terminal velocity

TheSilverJournal's picture

Gravity doesn't turn on and off. But if you equating terminal velocity to saying that they have reached the point which they can't print any faster, then you are very wrong. The rate of QE is going in one direction and it will increase literally until the balance sheet starts reaching for infinite. It's as easy as keystrokes on a computer. Short anything measured in dollars at your own peril.

JustObserving's picture

All this fiscal cliff BS over a trillion or trillion and a half deficit reduction over ten years.  Bernanke prints $1.02 trillion a year.  He will be printing for 4 years at least - that will be $4.08 trillion.

The only funny thing about the fiscal cliff is all this posturing.  Nothing will come of it and US debts and unfunded liabilities will continue to rise at $8 trillion a year while the politicians claim victory.  

Seer's picture

"The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary." - H.L. Mencken

They're tossing up a smokescreen to make it look like they're trying.  And when it fails, which is a 100% probability, they'll be able to point at the "opposing" political party as the "reason."

The other benefit is that you get people jumping on the bandwagons of these ridiculous party plays like it's some sort of sports game, rooting for the conquest by Their team, belittling the other "team."  Meanwhile the TPTB (of the "gods and masters" class) escape through the back alleys.

Same as it ever was... but! re-racking the next game is going to be a LONG way out, as this time the fires will burn far past the range of Rome...

are we there yet's picture

Many political historians 'Solzinyeitskin, etc' say that political leaders need a national enimy or national threat to unite a country to make it governable.  If they do not have an enimy they will make one up.  I am old enough to remember a continued evolution of the US until we appear to be in a permanent state of national threat.  I do not see it getting better, or us getting our old freedoms back, and market economy back.

dick cheneys ghost's picture

What this country needs is more bankster bailouts and more wars!

 

How come the Rockefellers aren't on the Forbes 400 list?

Zap Powerz's picture

What this country needs is an enema.

1100-TACTICAL-12's picture

I read the unfunded liabilities were around $211 trl. Over what times frame is this number projected next 20 yrs or what? anyone know?

boogerbently's picture

Reset.

Wipe the slate clean.

Santelli/Grant 2016?

Seer's picture

Reset WHAT?

Your taxes?  ALL OF SOCIETY?

"Wipe the slate clean."

Your debt?  Govt debt?  ALL DEBT?  Even by those who may have scammed their way to accumulating assets, these folks get to KEEP those assets?  CLEAN means a COMPLETELY fresh starting point, books are zeroed for everyone-no debt and everyone has the same amount/value of assets.  Are YOU ready to have your assets divided up?  Doubtful.  Assets of the scammers?  If you pick on them (and I'm not arguing that they should be protected, I'm only pointing out that the details are MUCH more difficult than just spouting out "sounds good stuff") then that's unequal, isn't it? (and how do "we" know when it's all done and equal, especially given the power that many have to evade)

"Santelli/Grant 2016?"  For WHAT?

People!  Learn this lesson: NO MORE governments, NOT MORE central power.

Cognitive dissonance, people blasting govt interference and then promoting folks for govt positions.  If you're fucking serious then the ONLY "SOLUTION" is for there to be NO GOVERNMENT.

The Joker's picture

OK, I'll play.  Don't all cultures evolve into some sort of geographical region with government?  Unless, of course, you go back 10,000 years.  Did evolution take a wrong turn?  If no government, then what?  Some sort of local community structure?  Still going to evolve gov.  I don't see a way around that, not with any sort of functionality.  Are you an anarchist too?  I like you, but please, I'm dying to hear, explain your solution.

Thisson's picture

The solution is a small and limited government.  Small enough that it can be funded by constitutional sources such as  impost taxes, etc. and limited to the designated powers articulated in the constitution.  None of this power-creep crap justified by a misreading of the interstate commerce clause, for example. 

Vashta Nerada's picture

The unfunded liabilities include benefits accrued to anyone who has paid tax, so that implies about 40 years forward when you include the few folks who have recently gotten withheld.

1100-TACTICAL-12's picture

So 211/40=5.275 per year there abouts. And this is not added in to any projections .gov makes.

The Joker's picture

What this country is going to get is a false flag of nuclear proportions.

Vashta Nerada's picture

I don't know that it will be false flag, but I do agree it is imminent.

The Joker's picture

Well, I'm not too good at math, not my strong subjekt.  Let's see, war is a necessary evil tied to debt.  Most, if not all, wars are started by false flags, because they are necessary in this beautiful system.  This is a growth system and has to grow exponentially (no?).  Therefore the debt has to grow exponentially (no?). = Exponential war growth.  So, do I multiply the numerater and the denominater or just the numerater?  Does the next false flag = 81/11 or 81/121?  Either way, it will be a doooooooooosie.

Seer's picture

ALL wars are about resources.  The debt/money part is just numerical representation of the status of resources.  But, yeah, it's inevitable that war is up next, as people are unwilling to face up to the fact that the only other direction is reversal and contraction.  Dick Cheney was right when he said that "the American way of life isn't negotiable."  People are unwilling (be they individuals, businesses, or government) to stop expansionism (growth).  To be fair, it's human nature, not just reserved for "Americanism" (sorry, AnAnonymous).

HardlyZero's picture

Quickly.  NOW !  Pump out the brow-high crapula now from the streets, the ceiling is approaching, and the floor is caving in !!  get out or get it done, or get over the whole thing...but get through it now.

mayhem_korner's picture

 

 

To cliff or not to cliff...that is NOT the question.  The fiscal cliff is nothing more than short-term political manuevering.  It is NOISE in the grand scheme of the teetering ponzi of unrepayable debt.  Pain is going to come, the only issues are the timing and strength of each dose.

The Joker's picture

I hate cliche's.  No pain, no gain.

Mike in GA's picture

My wife makes a great zucchini cliche...no pain lotsa gain. :)

 

HardlyZero's picture

Yes, but now the only exit is unsterilized printed crapula, or a Global Jubilee. or collapse  Pick one (now!)

Ayn NY's picture

Doesn't the fiscal cliff just take us back to Y2K spending and taxation levels? It sounds less painful than what Obama has planned and if more people have skin in the game then perhaps government spending will be an issue once again.

The Joker's picture

Optimism, the 8th deadly sin.  I have a feeling you are going to die in your sleep.

Ayn NY's picture

Just trying to look for a silver lining or a sliver of hope....

youngman's picture

It is sad....but politics is being spewed...not rational decisions....we are killing ourselves...we don´t need an enemy..we are doing it within...Russia and China are laughing their asses off....and licking their lips...

LawsofPhysics's picture

Russia (formally a part of the Soviet Union) has been there before and can't wait to capitalize.  They are more than smiling my friend, yes licking their lips perhaps.

FreeNewEnergy's picture


"We have met the enemy and he is us."

 

-- Walt Kelly (1913–1973), Pogo

LawsofPhysics's picture

What garbarge, no mention of fraud, cronyism or fascism.