The fiscal cliff is just a smokescreen. Its fiscal stupidity that is being covered up by Washington. The nation has been promising itself all kinds of benefits and payments that will be impossible to meet, ever.......
Of course, we can go on whistling in the dark until we run into the reality of a crisis we sometimes hear vaguely mentioned, when it is mentioned at all. It is not so much a matter of politicians meeting in the small hours to raise the debt ceiling (or refuse to raise it). It is what will happen when investors lose confidence in the ability of the federal government to put its finances in order. That will be reflected in their unwillingness to buy our debt at current low levels of interest. Look at Greece, where the interest rate on bonds went from about 5 percent to more than 16 percent in a short time. Look at how much more Greece has to pay on its bonds by comparison with Germany.Its just a matter of time. Of course no one wants to admit that all of these promises are impossible to meet and that adjustments have to be made. Obviously this fiscal cliff nonsense is the perfect time to put in place movement in that direction however, there are intrenched interests that just do not want to deal with reality. The opiate of central planning and collectivism is too strong for neo-liberals to give up on and they are hoping for a miracle. But these obligations WILL NOT BE PAID and all of these silly promises made to people will leave million disappointed and impoverished.
The question is not whether we must make the tough choices to put our nation's finances in order. The question is whether we will do so before the market forces us to do so.
Mort Zuckerman: Brace For an Avalanche of Unfunded Debt - US News and World Report