There’s always another recession out there somewhere, although the catalysts keep changing. Here’s a new one: feckless politicians who provide the raw material for the next downswing in the business cycle by driving us over the fiscal cliff. Your tax dollars at work…Not! If this diaster hits (and there’s no reason it should), it would be the first time that Washington knowingly, willingly, without any illusions, delivers the macro equivalent of suicide. Political dysfunction at its worst.
Yes, I think we can call this a new low if we don’t pull back from the brink before the year is out. The only mystery: Why isn’t the public mad as hell and unwilling to take it anymore? Maybe it’s because we just went through a tiring election that was overloaded with all the usual rhetorical twaddle and then some. And our prize for enduring this nonsense, er, election campaign? The growing threat that the White House and Congress will passively, by inaction, permit a dramatic sharp rise in automatic tax hikes and deep spending cuts, which will unleash a projected 0.5% drop in GDP next year and a rise in unemployment to 9.1% from the current 7.9% jobless rate, according to the CBO.
Yes, anyone who spends five minutes with the details will be angry. No one wants a recession, much less one packaged and delivered to your doorstep by your representatives in Washington—no extra charge. Weeks from now, if this fiscal version of the denouement in “Thelma and Louise”(sans the kissing) is still barreling toward us, one might expect that there will be protests in the streets, dissent from coast to coast, and a general recognition that our government has become incompetent in the extreme. We might call it the Occupy The-Political-Insanity-In-Washington Movement. Sign me up!
Then again, maybe we’ll avert crisis… at the last minute? Gee, thanks. But that’s better than a kick in the head. But perhaps the Republicans and Democrats can find a way to avoid bringing economic havoc to the people who elected them in a timely manner. Hey, it’s a thought. But don’t hold your breath, the pundits warn. At this late date, surely nobody is.
That leaves the unpleasant task of measuring the degree of darkness that advances over the economy, one economic report at a time. The tragedy is that the numbers published to date don’t look terrible, and perhaps even set us up for a bit of progress for economic growth. But that’s all set to evaporate if our buddies in D.C. don’t schedule an appointment for an attitude adjustment..
This republic deserves the government it elects–even one that provides its constituency with a slow-motion train wreck. And, yes, all this reflects as badly on us as it does on them.
This post was originally published at The Capital Spectator and is reproduced here with permission.