“Fiscal cliff” is a term often used to describe the conundrum that the U.S. government will face at the end of 2012.
Basically we can have tax increases and spending cuts or we can have smaller tax increases and fewer spending cuts and just borrow more to make up the difference, thus going even deeper into debt than we are now. (Some call the first choice the fiscal cliff while others argue that the either/or choice is the cliff.)
The first choice increases the possibility of a recession because it will depress economic growth. The second choice increases the likelihood of a financial crisis similar to that being experienced by some European countries, most notably Greece. (Though others are not far behind.)
Or we can adopt a compromise position to avoid toppling over the cliff. It will have to involve spending cuts.
Armageddon, according to the Bible is the site of an epic battle as the end of the world approaches. It is now often used to refer to any end of the world or end of an era event. The 1998 movie of the same name starts with this theme.
Thus, I use the term Financial Armageddon to denote the end of the United States financial system as we know it today. A growing number of economists are writing that we cannot sustain our economy (and perhaps our whole country) with the ever growing public debt. Someone needs to be paid interest and someone needs to be repaid for the billions and billions (read that as trillions) of dollars we are spending as a country.
When this will catch up is open for debate, but catch up it will. Greece, Spain and other countries are in the midst of their financial Armageddon right now. It is not an abstract concept!! It is important that we elect those who understand the importance of not continuing to increase our public debt.
But. and here is the kicker, because our public debt is already so great, even the first choice (which can lead to recession) could ultimately also plunge us into a Greek style financial crisis.
We need a skilled leader and economic policy makers who have some plan other than continuing to throw money at the problem via bailouts to get us out of this mess.
----rich borglum September 2012
CLICK Here for BBC News - France set for 'toughest budget in 30 years'
[from the BBC website September 28, 2012]
New York Times: Hunger on the Rise in Spain -- click here
Note the cause, as written in this paragraph
As Spain tries desperately to meet its budget targets, it has been forced to embark on the same path as Greece, introducing one austerity measure after another, cutting jobs, salaries, pensions and benefits, even as the economy continues to shrink.
I had asked my friend, Mike Watson, an "amateur economist," to review this before it was published, however he is ultra busy right now. Before he became a "concrete technical guru" Mike was an economics student in the Masters program at Iowa State University. His comments and corrections will follow when he has time.
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My other friend, Robert McCusker, publishes the blog "The Friday Follies" and has done so for ten years. A great deal of it is humor, including political humor, but there is usually at least one serious opinion piece, such as that below. It struck me as some information you may be able to use in discussions with "nonbelievers."
CLICK to go to the Follies
"The
economy is collapsing. Our embassies are being overrun.
Our
diplomats are being murdered, and our own government is blaming it on the First
Amendment.
And
Obama doesn’t know what to do about any of it, except for his usual plan of
lying. So he and his enablers in the media hope you’ll be distracted by
Romney’s “gaffe” of criticizing the Democrats’ strategy.
They
hope you’ll be offended that Romney pointed out what the Dems have been telling
you your whole life:
You
need the government to provide for you, and you can’t go a single day without a
handout. They hope you’re as credulous as the people who voted for them last
time."
~
Jim Treacher
-30-
