According to the news, the US politicians have finally decided not to take a running jump off the edge of the fiscal cliff and have come to some form of agreement in relation to US taxes. The markets have of course bounced dramatically because of the good news … or is it?
Firstly, this decision is late. US politicians have been trying to come to some form of agreement with regard to taxation and spending for at least 18 months; the deadline everyone was worried about was introduced to concentrate minds on an agreement. And yet no agreement was reached until the last moment. US politicians deserve to be fired for not coming to an agreement sooner.
Secondly, this decision is not a full decision at all. The agreement only covers taxation, and does not cover agreements on spending cuts. They have given themselves a further two months to agree the rest of it. And who is to say that they will manage an agreement this time around?
There are those who argue that the phrase “fiscal cliff” is scaremongering, and that it should really be called a “fiscal hill” (or some other phrase). They’re wrong.
The actual effects of going over the fiscal cliff may well be rather gradual with tax increases and spending cuts only gradually kicking in over the year of 2013. But that is ignoring the big problem.
The big problem is that the politicians in charge of the world’s largest economy are a bunch of incompetent idiots who would rather argue for partisan advantage than do their job – govern the country in the interests of all of the citizens of the US. In most circumstances, a bunch of people in charge of a large organisation who could not agree on a budget in a timely fashion could and would be fired.
Perhaps the citizens of the US should get together and “kick some ass” – point out to their politicians that they are expected to govern the country properly, and if they do not pull their socks up, they will all be booted out of office come the next election – Democrats and Republicans. It is not the fault of any one party, but the fault of both.