Best of the Week
Most Popular
1.Stock Market Crash and Recession Indicator Warning: Extreme Danger Ahead - Harry_Dent
2. Is This How World War III Begins, In Almost Complete Silence? - Jeff_Berwick
3.Trump Wins 2nd Presidential Debate, Betfair Betting Markets Odds Bounce - Nadeem_Walayat
4.Why Krugman, Roubini, Rogoff And Buffett Dislike Gold - GoldCore
5.End of SPX Stock Market Correction Nears - Tony_Caldaro
6.Get Ready for the Future - Exponential Machine Intelligence Mega-trend towards Singularity - Nadeem_Walayat
7.US Housing Market Bubble II – It’s Happening Again! - Andy_Sutton
8.FTSE BrExit Stock Market Panic Crash Resolves towards New All Time Highs - Nadeem_Walayat
9.Can Trump Still Win Despite Opinion Polls, Bookmakers and Pundits all Saying Hillary has Won? - Nadeem_Walayat
10.Gold’s, Miners’ Stops Run - Zeal_LLC
Last 7 days
Inflation About To Explode Higher - 22nd Oct 16
Still waiting for SPX uptrend to kick off - 22nd Oct 16
Will a Rising US Dollar Crush Gold’s Fledgling Bull? - 22nd Oct 16
Why The Global Economy Will Disintegrate Rapidly Back to Olduvai Gorge - 22nd Oct 16
GLD Bleeds Out; Weekly Gold Update - 22nd Oct 16
Stock Market Investment Success Through the “Investment Rule of 72” - 21st Oct 16
The Final Bottom in Gold - WHEN - 21st Oct 16
Gold Green Lights Upleg - 21st Oct 16
Demand for US Mints Silver Eagles has ‘Returned with a Vengeance’ - 21st Oct 16
Central Bankers Can't Stop The Death Blow Of The Post US Election Recession - 21st Oct 16
The Fortune at the Bottom of the Pyramid: Golden Opportunity for Frontier Asia - 21st Oct 16
Have You Taken These 4 Simple Steps to Improve Your Trading? - 21st Oct 16
The Stock Market is an Accident Waiting to Happen - 20th Oct 16
It's Rally Time for Gold and Silver Equities - 20th Oct 16
Cashless Society – Risks Posed By The War On Cash - 20th Oct 16
China's insane Housing Market Will Tumble and Crash in 2017 - 20th Oct 16
Donald Trump Bounces Going into 3rd and Final US Presidential Election Debate - 20th Oct 16
Attention Please: Phase Two of the Gold and Silver Train Now leaving the Station. All Aboard? - 19th Oct 16
How to Successfully Trade a Stock Market Crash - Black Monday October 19th 1987 - 19th Oct 16
Tesla, Apple and Uber Push Lithium Prices Even Higher - 18th Oct 16
Silver, Debt, and Deficits – From an Election Year Perspective - 18th Oct 16
UK Property Market: Slow Growth Does Not Equate To Decline - 18th Oct 16
Trump Election Victory is in Your Power - 18th Oct 16
Stock Market More to Come! - 18th Oct 16
This Past Week in Gold and Silver - 17th Oct 16
A Falling Stock Market Cannot Be Allowed - Financial Repression Is Now “In-Play”! - 17th Oct 16
Commodities, Forex and Stock Market Trend Forecasts - 17th Oct 16
Stock Market Crash..or No Crash? - 17th Oct 16
A perspective on risk rally – Risks abound but Stock Market is Confident - 17th Oct 16
Bank of England Blames Brexit for Sterling Drop Inflation, Masks QE Money Printing Cause - 17th Oct 16
From Piety to Pride to Pity, America's Racial Divide - 17th Oct 16
Is Obama Juicing US Government Spending To Get Hillary Clinton Elected? - 16th Oct 16
Seek Your Independence: Anything Else Will Destroy You - 16th Oct 16
SNL - US Presidential Debates, 1st, 2nd, VP - Like You've Never Seen them Before! - 16th Oct 16
End of Economic Growth Sparks Wide Discontent - 16th Oct 16
Donald Trump on Life Support, May Abandon Election Campaign and War on Republican Party - 15th Oct 16
The Gold Manipulators Not Only Will Be Punished, They Have Been Punished - 15th Oct 16
Black Votes Matter - Is the US on the Verge of Mass Race Riots? - 15th Oct 16
Gold Stocks Screaming Buy - 14th Oct 16
Brace Yourself for the Quadrillion-Dollar Reckoning - 14th Oct 16
The Next Recession Will Blow Out the Budget - 14th Oct 16
John Mauldin: My Infrastructure Plan to Save the US Economy - 14th Oct 16
World War III On The Brink: War Will Continue Until It Triggers Economic Collapse - 14th Oct 16
US T-Bill Rejection At Ports In Progress - 14th Oct 16
These 2 Debt Instruments Pose Peril to Millions of Investors - 14th Oct 16
China’s Rocketing Housing Market Real Estate Bubble - 14th Oct 16
DIY Winter Home Maintenance Money Saving 22 Point Checklist to Get Ready for Winter/Fall - 14th Oct 16
US Stock Market, Big Picture View - 13th Oct 16
Stock Buybacks Main Force Driving Bull Market; Rewards Investors and Starves Innovation - 13th Oct 16
SPX Gapping Down... - 13th Oct 16
Syria - Obama Stepped Back From Brink, Will Hillary? - 13th Oct 16
The Structure and Future of Gold in the Investment and Monetary World - 13th Oct 16
Can Trump Still Win Despite Opinion Polls, Bookmakers and Pundits all Saying Hillary has Won? - 12th Oct 16
Gold and Crude Oil - General Stock Market Links - 12th Oct 16
Samsung's Galaxy Battery Just The Tip Of The Iceberg - 12th Oct 16
Hillary: Deceit, Debt, Delusions (Part Two) - 12th Oct 16
Gold and Silver Metals Show Strength Relative to the USD Index - 12th Oct 16
Announcing Trader Education Week -- a Free Event to Help You Learn to Spot Trading Opportunities - 12th Oct 16
Confirmed Stock Market Sell Signals - 11th Oct 16
Hillary Deceit, Debt, Delusions - 11th Oct 16
Trump Support Crashes to New Low of 6.4 on Betfair Odds Betting Market - 11th Oct 16
The World Is Turning Dangerously Insular - 11th Oct 16
An American Tragedy: Trump Won Big - 11th Oct 16

Free Instant Analysis

Free Instant Technical Analysis

Market Oracle FREE Newsletter

LEARN to Trade

Fiscal Cliff Reality

Politics / US Politics Dec 23, 2012 - 11:26 AM GMT

By: Stephen_Lendman


Political Washington theater continues. Republicans and Democrats agreed years ago to erode America’s social contract en route to eliminating it altogether.

Crisis conditions create opportunities. Former White House chief of staff, Rahm Emanuel, explained.

“You never want to let a serious crisis go to waste,” he said. “What I mean by that is that’s an opportunity to do things you couldn’t do before.”

He didn’t mean populist ones. He had harsh neoliberal ones in mind. They’re institutionalized. Ordinary people and America’s most disadvantaged suffer most. The worst is yet to come.

Both sides agree. They’re on board to give bankers, warmakers, other corporate favorites, and super-rich elites a bigger piece of the pie. Getting it depends on stealing it from most others. It’s happening in real time. Grand larceny writ large looms.

Washington scoundrels also want more money for corporate America, for super-rich elites, to militarize space, fund America’s imperium, and wage global wars on humanity. Fiscal cliff hype hides their real agenda. It’s hugely ugly, destructive and repressive.

So-called negotiations, headlines, and hype are noise. Both sides will choose their time, place, and explanations to announce final deal terms.

December 31/January 1 are fictitious deadlines. Cuts can come any time. They can be made retroactive to yearend. One deadline alone matters.

On March 27, America runs out of money. It’s when debt ceiling limit is reached. US law requires Congress authorize borrowing amounts to fund federal programs.

Doing it means raising the ceiling by late March or sooner. Agreement in principle is baked in the cake. Announcement can come anytime before March 27. Expect details to be finalized along the way.

Corporate approval sealed a done deal. Promised tax cuts bought support. Neither side of the isle dares disagree. Pre-holiday headlines conceal more than they reveal.

“Boehner Cancels Tax Vote in Face of GOP revolt,” said the New York Times. The Washington Post headlined “Bonner abandons plan to avoid ‘fiscal cliff.’ ”

“Boehner’s ‘Plan B’ Collapses,” said the Wall Street Journal. Claiming rebellion in Republican ranks is nonsense. Worse still are hyped fears about tumbling over the fiscal cliff.

Brinksmanship is for show and headlines. The Congressional Budget Office (CBO) estimates a 4% GDP hit without agreement by both sides.

Cancelling Thursday’s vote was tactical. Both sides remain on board in principle. Agreement in some form can come post-Christmas, post-New Year’s or later. March 27 is the only deadline that matters. Expect no problem reaching it in time.

Why act now when doing so looks like capitulation. Toughmindedness keeps party faithful loyal. As long as corporate bosses remain on board, resolution will come in time to avoid trouble.

Fiscal cliff hype is political and media scoundrel deception. In reality, no short-term apocalyptic times loom. Suggesting it is doublespeak duplicity. Scare headlines comes at the expense of reality.

Most people don’t understand so they believe them. They’d know otherwise if they relied on legitimate alternative sources for news, information and analysis.

Media scoundrels avoid it. They and politicians thrive on deception. It’s prioritized to pursue policies benefitting America’s 1% at the expense of all others.

In its November 2012 report, the CBO estimated a $503 billion 2013 economic hit if tax cuts expire and spending cuts become effective January 1. Another $682 billion will follow in 2014.

Only $85 billion in 2013 represents spending cuts. It amounts to $20+ billion per quarter. It’s matters little in a $15 trillion economy. In 2013, it’s expected to exceed $16 trillion.

The other $418 billion represents expiring Bush era tax cuts and ending the 2% payroll tax holiday.

Imposing it was a stealth scheme to drain hundreds of billions from the Social Security Trust Fund. Doing so irreparably weakens its ability to pay future benefits.

Assuring it or creating that impression remain policy. At issue is wrecking the program. Privatizing may come first. Medicare and public pensions face similar threats. So do Medicaid, education, food stamps, and other social safety net protections by other means.

Dark forces never rest. Their bottom line is thirdworldizing America. They’re on track toward doing it.

Increasing or cutting taxes have little economic effect. Mainstream economists understand but don’t explain. Nor do media scoundrels. They prefer scare tactic headlines.

Productive economic investment matters most. Job creation relies on it. Incomes are generated. When people have money they spend it.

Tax cuts corporations got were hoarded. Corporate America has $2 trillion stashed away. It’s largely not invested. Throughout 2012, business investment declined.

Other amounts are used for stock buybacks, acquisitions, dividends, offshore activities, and speculation.

It bears repeating. Fiscal cliff hype is nonsense. What matters is how what’s planned affects economic activity in 2013 and longer-term.

Harming it domestically will be exacerbated by rapidly declining global manufacturing, trade and exports. Economist David Rosenberg worries about a troublesome “sea of uncertainty.”

Major global debt imbalances aren’t resolved. The world is awash in excess labor and product markets capacity. Without business investment, growth isn’t possible. Decline continues.

Force-fed austerity exacerbates it. It’s counterproductive when stimulus is needed. At the same time, money printing madness creates the illusion of prosperity or efforts made to restore it.

Bernanke committed to fund America’s growing deficits. He’ll buy half of new government debt issuance next year. Interest rates will stay near zero.

Expect this madness to work until it doesn’t. The fullness of time will explain when. When day of reckoning time arrives, the mighty will tumble with others.

The entire financial system may crash. Crisis conditions may exceed the worst of 2008. Harder than ever times may follow. They’ll likely persist long-term.

It’s hard imagine prospects this grave aren’t addressed responsibly. It should have been done years earlier. Doing it now is key. Instead, politicians in league with corporate bosses want maximum shorter-term gains at the expense of letting the devil take the hindmost.

In 2013, greater economic drag will deepen. Expect it to continue in 2014. It’ll persist longer-term. That threat is real. Fiscal cliff hype is fake.

Deal terms will be announced. Whether this year or early next doesn’t matter. Bipartisan agreement assures harder than ever hard times. Political solutions exacerbate real problems.

Instead of addressing them responsibly, they’ll persist. Ordinary people will be hardest hit. America’s social contract will be shredded. That’s what fiscal cliff hype is all about.

By Stephen Lendman

His new book is titled "How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War"

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached in Chicago at

Also visit his blog site at and listen to The Global Research News Hour on Monday through Friday at 10AM US Central time for cutting-edge discussions with distinguished guests on world and national topics. All programs are archived for easy listening. © 2012 Copyright Stephen Lendman - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2016 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife