Loosely attributed to politically outspoken rock legend Frank Zappa is the notion that politics is the entertainment wing of the military industrial complex. But unless you enjoy economic drama (or tragedy), the playbill for 2013 is already looking pretty lousy.
For months, political news coverage has been saturated with talk of the United States’ damning march toward fiscal ruin; the Nation can almost certainly look forward to confusion as tax rate increases coupled with automatic government spending cuts take place in coming days.
There is some chance that lawmakers could still reach an agreement to lessen some of the consequences of the Nation’s plummet off of the fiscal cliff. But even so, Americans will not have heard the last of depressing economic news.
Just as many people are celebrating the beginning of the New Year with promises of better lifestyle choices and new beginnings, the Nation will have once again maxed out its extraordinary debt limit. The $16.4 trillion in approved government borrowing will be exhausted on New Year’s Eve.
Treasury Secretary Timothy Geithner has urged lawmakers to prepare to take big steps in addressing the pressing debt problem. Without coming to an agreement about how to handle the fiscal cliff first, though, it is unclear how much can really be done.
Treasury is examining options that it had previously considered in 2011 when the government exhausted its borrowing power and earned a credit downgrade from ratings agency Standard and Poor’s.
“However, given the significant uncertainty that now exists with regard to unresolved tax and spending policies for 2013, it is not possible to predict the effective duration of these measures,” Geithner wrote to lawmakers.
On the Treasury shortlist are measures such as selling portions of the Nation’s gold reserves and other Federal assets, or simply withholding payments until tax revenues cover its checks. But Geithner isn’t convinced that any of those measures would be good news for the economy.
“Treasury reached the same conclusion that other administrations had reached about these options,” he wrote in analysis. “None of them could reasonably protect the full faith and credit of the U.S., the American economy, or individual citizens from very serious harm.”
Political grandstanding continues unabated, as Republicans calling for very serious cuts to government spending to accompany any debt ceiling increase continue to be stonewalled by the Administration of Barack Obama.
House Speaker John Boehner (R-Ohio) said he would agree to go along with the President’s debt ceiling increase for one year if the President would agree to equal amounts of spending cuts. Obama said he wants two years.