So Who Gets Hurt Falling Off the Cliff?

Sunday, December 16, 2012

Let's get one thing straight from the start. There is no such thing as a "fiscal cliff." If Congress fails to reach a budget deal by Jan. 1, Jan. 2 will not see the U.S. economy in a state of total meltdown by the 15th, leaving us fighting street battles in "Road Warrior" fashion for food, gasoline and toilet paper.

The phrase "fiscal cliff" is purely a creation of a sensationalist media desperate for some kind of major drama now that the election is over.

And their narrative on the current budget negotiations is as overwrought and ridiculous as the one they stuck to right up until Election Day, the narrative that insisted that it was a "horse race" and that the candidates were "neck and neck," even though President Obama held a solid lead in the Electoral College and had done so for months.

When the media and the politicians talk about the fiscal cliff, what they're describing is a series of tax hikes (actually long-delayed expirations of Bush-era tax cuts) and across-the-board spending cuts that Congress put in place as part of a deal to raise the nation's debt ceiling and keep the country from going into default.

The "logic" apparently ran like this: "Since we're too immature, especially with an election looming, to deal honestly on the budget without grandstanding and preening for the cameras like WWE wrestlers to show primary voters how tough we are, we'll set a bomb to go off after the election if we can't act like grownups."

The tax "hikes" would supposedly be more than the Republicans could bear, and the spending cuts, to both military and domestic spending, would be more than either side could stomach. At least that was the idea.

But it seems that nothing, not even military spending or economic stability, is as precious to the Republican Right as tax breaks for the wealthy. The president, on the other hand, explicitly ran on a platform that called for those tax breaks to end, while tax breaks for the middle class would stay in place.

As you may remember, he won.

People who have studied the art of negotiation talk about analyzing your BATNA, an acronym that stands for "Best Alternative to a Negotiated Agreement." In plain English, analyzing your BATNA means honestly facing the question "What happens if we don't settle this?"

So what happens if we "go over the [mythical] cliff"?

Well, for one thing, taxes on everyone go up - to the same rates they were under President Clinton. There would be, according to the financial newspaper Barron's, "deep, automatic cuts in the defense budget and more than 1,000 other government programs, including Medicare."

The economy might very well slide back into recession, at least temporarily. But here's the thing: According to the Congressional Budget Office, the budget deficit would be reduced by $560 billion.

Wait a minute, I can hear you saying. Isn't reducing the deficit the Most Important Thing in the Whole Wide World? Certainly that's the position the Republicans took during the election.

"If we don't reduce the deficit," they bleat over and over, "we'll end up like Greece! You don't want us to end up like Greece, do you? Greece! Greece! Greece is the word!" (Actually, if it meant I could get a decent souvlaki around here, being a little more like Greece might not be so bad. But I digress.)

So why isn't the Republican BATNA - $560 billion in deficit reduction - acceptable to them? Because, as noted above, this has never really been about deficit reduction above all. This has always been about keeping rich people's taxes low. It's also about saying no to the president their shrinking base loves to hate.

In contrast, what's the BATNA for the Democrats? Jan. 1, taxes go up on everyone, including the wealthy.

At which point the House Democrats introduce a revival of just the tax cuts that help the middle class and dare the Republicans to vote against it. If they agree to the cuts, they lose the fight; if they refuse to vote for them because they don't protect the wealthy, they lose the House, possibly forever.

As for those spending cuts, we'll see how much people continue to love the Republicans when they start seeing cuts to programs like college loans and Medicare. I suspect that popular programs will quickly find their way back into the budget, and guess who'll get the credit for that?

In any negotiation, the player that gets hurt least by walking away, the player with the best BATNA, is the one with the power. In this case, that's President Obama and the Democrats.

Dusty Rhoades lives, writes and practices law in Carthage. Contact him at dustyr@nc.rr.com.

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fugitiveguy 5 months, 1 week ago

Obama Raise Taxes, Capital Gains For Purposes of Fairness by RadioAlamo

"Because, as noted above, this has never really been about deficit reduction above all."

For once your are right...if you are talking about President Obama. Love to hear your take on this video, particularly the first 1.5 minutes.

Yukonjohn 5 months, 1 week ago

fugitiveguy I saw that debate and remember him saying that. I thought at the time, surely he will not win, he is clueless. Well, guess I was wrong.

njc17 5 months, 1 week ago

My take on this whole deficit and debt issue is, Obama's PLEDGE to 'level the playing field'Is there a "Fiscal Cliff"? not really, but there is a dangerous fiscal problem growing if we do NOT GET our fiscal house in order,Obama wants the ability to raise the debt ceiling as he 'sees fit' to print more paper . The problem as i see it now , it the republican congress is weak. sure there are the shouters and hardliners but there are more of the John Boehners who in the end will cave. We can not stand any more raising the debt ceiling. THIS spending MUST be curbed. The entitlement factor is growing and will drown this nation if left to fester. The writer does not see the kinship to the European debt crisis? look again, we will be there if we don't get the entitlement fixed. a second problem has emerged and that is he growing federal payroll. Obama seems to think he can cure the unemployment problem by hiring on more and more federal workers. that creates a vast unyieldy beaurocracy.

Yukonjohn 5 months, 1 week ago

njc17, The way I understand sequestration, it will end many programs, some good, some that need to be ended. I say, "Let's go over the cliff....wide open, see what happens" I think it would be a better thing for this nation than for them to cave and still continue to spend. Either way, the whole thing is unsustainable, and will collapse soon enough.

renoace 5 months, 1 week ago

say what you will - to be fully armed and stocked with ammunition is to be prepared for the eventuality of whatever happens - whether foreseen or unexpected - don't know what David Crockett shared with you about operating a practice of law, but in Boy Scouts the message was "be prepared".

some days it seems the best hope for mankind is that some sort of cataclysmic chlorine spill in the gene pool occurs.

The intellectually inept crowd really makes me laugh - there isn't enough ammunition - but I am working on a solution -

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renoace 5 months, 1 week ago

*Disclaimer: while I am not a credentialed expert in millimeter-wave and terahertz systems - I do know my stuff pretty well for a salty ol Thidwickian. I call it selective weaponry based on indicators fused with disintegrative proton mass which as opposed to a projectile uses a laser and a spectrometer fusion technique that reduce the target to a pillar of dust and can be configured as a wide band to be geographically dispersed or narrow band sequenced to be a one to one murdering machine - *

the technology was not well understood back in 93 when I first started learning about it and fiddling with it since the array antilogarithms processes such as the gene expression and DNA replication target time acquisition system that would then have been needed to be used to operate the dispersement patterns were not yet integrated into the firmware with traditional on orbit capable satellites
the telemetry was not the concern then - nor was the trajectory or delivery system - it was the capacitance and relative frequency of the nested milimeter wave scanners now commonly referred to as miliwave scanners being in the low range of gigahertz
with the advent of terahertz waves, the radiation in the electromagnetic spectrum between microwaves and the infrared changed the mathematics of the equation. In addition, terahertz waves pass through non-conducting materials such as clothes, paper, wood and brick and so cameras sensitive to them can peer inside envelopes, into living rooms and 'frisk' people at distance
the neat thing is that because terahertz photons are not energetic enough to break chemical bonds or ionize electrons, it's easy to dismiss fears over their effects. But the evidence is mixed: some studies have reported significant genetic damage while others, although similar, have reported none. A team led by Los Alamos National Labs thinks the forces that terahertz waves exert on double-stranded DNA are tiny, in certain circumstances resonant effects can unzip the DNA strands, tearing them apart. This creates bubbles in the strands that can significantly interfere with the subject or subject(s) life
The most interesting functionality of the weaponry embodiment of the technology offers many forms of directed malicious utilities that can be selected based on the desired outcome to effect the target - ranging from a low impedance broadcast to high impact barrages of waves - as alluded to by Los Alamos researchers, although the forces generated are tiny, resonant effects allow THz waves to unzip double-stranded DNA, creating bubbles in the double strand that could significantly interfere with processes such as gene expression and DNA replication.
At the very minimum we have a weapon that can remotely and anonymously render entire regional populations or selected individual targets sterile with the flick of a switch without them ever knowing.

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renoace 5 months, 1 week ago

There are numerous benefits to this type of system - anonymity being the greatest benefit - but by nature of not having to use a detonator and being able to deliver a persistent attack from a space borne satellite or a fixed node of operation within the confines of a properly engineered system an assassin can sit at a terminal linked by a VOX/NET styled control box and by using a video link scan and shoot a target remotely from another continent and be having a beer on the beach at the same time - or by using the wide scale dispersement the mode can take out an entire city or region if desired, I wanted to emphasize to everyone reading that the only commercial terahertz imaging system currently in use that I am aware of is passive, (ThruVision's). The apparent difference in radiometric temperature is what constitutes the final image - There is no emission of terahertz radiation by this system.

On the other hand, the active microwave systems, which operate around 35 GHz - there are variations on this - are essentially an active radar system. You are exposed to some non-ionizing radiation, and active microwave systems are irradiating you, but at a level far below your cell phone. SPIE conference publications have detailed data by the Pacific Northwest National Lab group that pioneered the system that is currently in airports
active microwave systems have far better spatial resolution than passive terahertz systems - and have a great SNR due to transmitting their own microwave power - passive systems mostly use direct detectors, which are really only sensitive to the magnitude of the radiation.
A heterodyne receiver is very sensitive, but is very narrow-band [340 GHz, +/- 5 GHz],- radar algorithms provide spatial resolution that is better than diffraction-limited optics
On the other hand, the passive terahertz systems are limited by the diffraction limit, and the operational wavelength gives their spatial resolution.
A passive terahertz system operating at 1 THz would give better images than a passive system at 340 GHz, in terms of spatial resolution. However, transmittance drops off as frequencies increase

The amount of power needed to "unzip" DNA with terahertz frequencies is very high, - there are terahertz lasers (at the several microwatt level), but you should be more afraid of a 10 micron CO2 laser that will punch a hole through your chest, and is also quite invisible.

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renoace 5 months, 1 week ago

Yonder comes a man

njc17 5 months, 1 week ago

Are we on the same planet, here? Is this germain to the fiscal issue?;

teufelhunden 5 months, 1 week ago

Scary much? Dang.

clarabelle 5 months, 1 week ago

damn - and here I thought fugly and AP rambled incoherently.........

clarabelle 5 months, 1 week ago

"Obama wants the ability to raise the debt ceiling as he 'sees fit' to print more paper . "

Another stupid partisan comment.........

"Since March 1962, the debt ceiling has been raised 74 times, according to the Congressional Research Service. Ten of those times have occurred since 2001. "

OldPilot 5 months, 1 week ago

He starts with "...to be fully armed and stocked with ammunition..." and goes downhill from there. Paranoia, just plain nuts or an NRA/second amendment solution/anti-democratic society time bomb looking for a time and place to detonate, up the body count, maybe even set a new all time record?

justpassingby2 5 months, 1 week ago

The president, on the other hand, explicitly ran on a platform that called for those tax breaks to end, while tax breaks for the middle class would stay in place.

Fool me once, shame on you. Fool me twice, shame on me!

And have you ever seen so many people not able to figure out that our biggest problem is spending? It has always been spending. From President Carter, reagan to bushes and especially clinton only because he had the economy to make a difference, they have just pushed the problem out in time. obama did the same thing not even bothering to try and make a budget! I think obamacare is coming along at the exact perfect time. Even the half-wits will figure it out and look back and wonder what the heck were they thinking in reelecting obama. If you aren't going to end the wars (has the Middle East ever been a bigger mess?), do something about our schools or at least try to mend our country's divisiveness, you may as well have a wingnut who at least understands economics!

justpassingby2 5 months, 1 week ago

No offense clarabelle, but your post makes no sense.

Middleman522 5 months, 1 week ago

When 50% of our country has been hurt by the bank crash caused by Fannie and Freddie and someone comes along and promises to steal money from "rich" people and redistribute it to poorer folks, they call that a mandate. Really? How do you think the 25% of this country that made preparations years ago for just this kind of currupt mortgage activity feel about giving their wealth to people that did not prepare? Actions have consiquences, and I don't mean giving people another chance to screw up with someone elses money. Let these smart people create jobs and they will hire these folks and teach them not to let this effect them next time. Unless the Unions convince them not to listen to those mean old job creators...

clarabelle 5 months, 1 week ago

"justpassingby - No offense clarabelle, but your post makes no sense."

I didn't think it would! The debt ceiling wasn't at all an issue "ever" - until Obama became president! It had been passed ................... well read the post again!

I am certain conservatives never wailed at those ..............

called hypocrisy ............. and the usual partisan crap!

Jason 5 months, 1 week ago

$1 trillion minus $400 billion (manageable debt) = $600 billion minus temp tax breaks minus less revenue due to recession minus temp more qualified for unemployment insurance minus less military spending. http://www.nytimes.com/2012/12/17/opinion/krugman-that-terrible-trillion.html?hp&_r=0

Middleman522 5 months, 1 week ago

Clara.. Who said it was UnAmerican to take a Credit Card from China and run up $4trillion in 8 years?? Do you want to guess or keep your head in the sand like a good lil lib?? The same clown that piled up $6trillion in 4 years. Your Man!!

clarabelle 5 months, 1 week ago

Middleman522........... I always have to smile when I read the biased stuff you post. I do wonder if you are really dumb enough to believe that Obama could actually do that by himself. Because of a republican house - he can't even get legislation passed to allowing farting in public!

Too bad........... - ill bet it hurts to hold it in!

Courseaire 5 months, 1 week ago

For his 1st two years, I think that's all they did.

fugitiveguy 5 months, 1 week ago

president barack obama when he was candidate barack obama pledged to cut the deficit in half by now, instead it grew by > 5T. What happened?

Courseaire 5 months, 1 week ago

FG - Geithner economics

clarabelle 5 months, 1 week ago

" fugitiveguy - president barack obama when he was candidate barack obama pledged to cut the deficit in half by now, instead it grew by > 5T. What happened? "

Well - many economists credit him with averting a major depression.

But yeah - I guess you are right........... he did this all by himself - no congress to help him at all!

clarabelle 5 months, 1 week ago

" Courseaire - For his 1st two years, I think that's all they did."

I agree ...... it's called republican filibuster!

fugitiveguy 5 months, 1 week ago

"Well - many economists credit him with averting a major depression."

Do any of them have a name?

dustyrhoades 5 months, 1 week ago

the bank crash caused by Fannie and Freddie

Assumes facts not in evidence.

fugitiveguy 5 months, 1 week ago

C-SPAN Democrats Cover Up Fannie Mae, Freddie Mac - Housing Crash by rlwieneke

Here you go DR. These facts will not support your politics so I guess you will find a piddly reason to discount them. Or just ignore them outright

clarabelle 5 months, 1 week ago

Here you go fugly. These facts will not support your politics so I guess you will find a piddly reason to discount them. Or just ignore them outright!

http://andrewsullivan.thedailybeast.com/2011/11/dish-check-who-caused-the-financial-collapse-not-fannie-and-freddie.html

http://www.nextnewdeal.net/rortybomb/six-rebuttals-argument-congress-or-fannie-and-freddie-caused-crisis

http://www.123jump.com/market-analysis/Six-Myths---Fannie-and-Freddie-Caused-the-Housing-Bubble/47277/

so easy to play politics and blame one side!

justpassingby2 5 months, 1 week ago

Clarabelle, only because I feel sorry for you I will explain how your post made no sense. The argument of raising the debt ceiling is one issue. Who should be able to raise the debt ceiling is a completely separate issue. The fact that the debt ceiling has been raised 74 times is an argument for raising the ceiling, weak as it may be, but doesn't explain why you think the President should be given the power to raise the the ceiling on his own.

justpassingby2 5 months, 1 week ago

Anybody know why the pilot ended discussion on the 'Our Gun Culture:..' thread? Too funny how some half-wits think they know what is best for us and what is too sensitive for people to deal with. Hopefully when someone finally finds a bigfoot, it will lead them to the intellectual liberals' hideout! Or vice versa for that matter!

Middleman522 5 months, 1 week ago

Clara that's exactly what he is asking for. Unlimited ability to raise the debt limit. What news source do you use, Big Bird? Remember Al Gore said Moose Farts caused global warming. Liberal hot air is a better suspect! And what is biased about quoting Oblaima? Please try to explain!!

Middleman522 5 months, 1 week ago

Dusty I can show you proof about Fannie and Freddie.But you can't handle the truth! Sit down for 30 minutes in front of a computer with me, and you will throw up!

clarabelle 5 months, 1 week ago

justpassingby - to be quite honest - I am not all pleased with obama regarding fiscal responsibility........... but even you have to admit .... until he came into office - raising the ceiling was simply a cosmetic endeavor.

There are much better ways to evoke a fiscal conscience than what the republicans are doing.

Courseaire 5 months, 1 week ago

There are much better ways to evoke a fiscal conscience than what the republicans are doing. CB - You've intrigued me, what is better than increasing the tax base and cutting spending?

fugitiveguy 5 months, 1 week ago

Obama Raise Taxes, Capital Gains For Purposes of Fairness by RadioAlamo

the wit and wisdom of the great and powerful "O"

dustyrhoades 5 months, 1 week ago

Dusty I can show you proof about Fannie and Freddie

Sure you can.

fugitiveguy 5 months, 1 week ago

Dusty knows the truth about Fannie and Freddie, it paints some of the liberal icons in a very negative light, it disproves a lot of the bs he and other leftists have spread over the years, therefore he will not acknowledge it let alone discuss it. Its all in the video, its cspan not fox, it couldn't be any more clear.

justpassingby2 5 months, 1 week ago

Anybody know why the pilot ended discussion on the 'Our Gun Culture:..' thread?

What a shock! It was dusty being dusty! And it was two threads. Poor stupid dusty!

Middleman522 5 months, 1 week ago

Dusty all you have to do is sit for 30 minutes with your mouth shut and your eyes open! Read an article in the NYTimes from Sept. 31, 1999 about Franklin Raines and Fannie Mae stopping the requirement of down payments on low income, bad credit mortgages (100%), due to pressure from the Clinton Administration! How do you make $42 Billion in bad loans worse, down payment assistance program. Mix that with $200billion in good loans and don't tell anyone, there is your bank crash! Politically correct and financially insane Mortgages! Basically shutting down lending nation wide! Tarp loaned money to the banks that had all of their assets tied up in Raines' bad mortgages, and could not sell them on the secondary market. You forget that all of Hillary's fellow employees of Rose Law went to jail for loans!! All of Slick Willie's friends were in that racket in AK. He promised to change the laws to get re elected after losing the first try at a second term. I digress!

getreal 5 months, 1 week ago

I'm a bit late to this party, but is anyone as disturbed about the posts from "renoace" as I am? Considering the horror of Sandy Hook, this poster is unnerving. The killer was very intelligent and out of touch, this poster could be as dangerous as he was. His fascination with killing by unusual methods and weapons seems like a red flag to me. Is the Pilot able to report this nut case? Think about it, if the killer in Connecticut had posted rambling insanity like this guy and it wasn't reported, everyone would be crying foul now. This one is scary and seems very out of touch with reality. He begins his post with talking about being prepared and stocking ammunition. Be afraid, be very afraid. This could be our own Sandy Hook in the making. I am not one to be easily alarmed, I guess the recent horror of the murdering of innocents has me more on edge than usual, but those posts are not normal in any sense of the word. It makes the other posters on here seem more like the norm and that is saying something. I ask the Pilot to check this one out.

Yukonjohn 5 months, 1 week ago

I say, let's race over the fiscal cliff!! It will be very painful, and will costs me some amount of my money, but it also reins in the spending of the President. I say, stand strong Republicans, but somehow l doubt that they will. They will cave, and our economy will continue to race on to the real fiscal cliff. The one that completely destroys the dollar as currency. It is kind of funny, and not in a "ha-ha" way. We need money to survive, and we will be like the Germans were when it took a wheelbarrow to buy a loaf of bread. When that time comes, it will be very ugly.

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So Who Gets Hurt Falling Off the Cliff?

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