Sunday, December 2, 2012

The President Owns 2013

Whatever happens to the economy in 2013 belongs to the President.  There is no way out of that regardless of how the media attempts to blame the President's critics.   Congress has never been blamed for a recession.  Hoover was in the first year of his first term as President when the Great Depression began.  While Hoover had nothing whatsoever to do with causing the Great Depression, his name will forever be associated, in a negative way, with the Great Depression.

One suspects that 2013 is going to be a disaster quite independent of what resolution there may or may not be to the fiscal cliff.  But, the President's proposals have the potential to make the situation far, far worse.  One virtue of going over the cliff is that everyone will get a small taste of our future.  Sooner or later the national debt, now over $ 16.3 Trillion and growing by ten percent per year, will simply overwhelm any realistic effort to bring it under control.  Social security and medicare will default in part or in whole and the entire American government financial pyramid will collapse.

Avoiding this spectacle will not be easy.  But the first step is simply to ignore the White House and proceed over the fiscal cliff.  The next step will be to refuse to extend the debt limit and let nature take it's course.  If these two steps are taken, the country's financial house would have a chance of being put back in order.  Yes, it would be painful for a while, but at least the country would have a future.  Now, the country only has a past.

So, who will be blamed?  The first response is: who cares?  If it takes steps one and two to save the country, then why not take them regardless of blame.  But, the second response is that the President will be blamed.  He presided over this entire fiasco.  He came into office with sweeping majorities in the House and Senate.  His policies prohibited any real economic recovery and his current proposals all but guarantee a renewed recession and higher unemployment.

Strap on your seat belts.  Fiscal cliff -- here we come!

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