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Will the Fiscal Cliff Eat the Recovery, Such as It Is?

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Lately, the US has been winning the investment beauty contest among Cinderella’s ugly sisters. Europe’s addiction to austerity, rolling rescues, and inability to address internal imbalances means at best a wild ride and at worst a crisis resurgence. China still has its perennial fans, but long-standing bears like Jim Chanos have been joined more recently by Marc Faber, who foresees 3% growth, which is tantamount to a recession. Japan is struggling with a mile high currency. The US, by comparison, does not look too bad.

Or does it? One of the lurking worries in the background is the so-called fiscal cliff. At the end of 2012, a whole passel of tax breaks and special programs expire, from lower payroll tax rates to extended unemployment benefits. This has been lurking in the background for a while (indeed, the US would have faced a contraction in fiscal spending at the end of 2012 had various breaks not been extended).

Ben Bernanke brought the issue to the fore in Congressional testimony today, stating that consumer spending would suffer if Washington continues on an inertial course. Estimates of impact vary considerably. Normura puts the effect at nearly 5% of GDP in the first half of fiscal 2013, which starts October 2012. Deutsche Bank estimates the drag at only 1% of GDP, but the consensus seems to be 3% to 5%.

Needless to say, Wall Street does not want its punchbowl taken away (they really don’t care about the impact on ordinary people) and Uncle Ben also said clearly that he can’t compensate for the contractionary impact, so we have a flurry of alarmed reports tonight. (Mind you, I’m not saying this isn’t a big deal, but what it takes to precipitate coverage is amusing).

Some recent commentators are worried that it isn’t possible to get a deal done post election (the trigger date for most of the changes is calendar year end). For instance, FT Alphaville pointed to this column by Stan Collander a few days ago:

Even if there were an agreement on what that should include — and there absolutely isn’t ­— it would take longer than four to seven weeks just to draft the basic legislation, let alone debate and pass it in committee, debate and pass it in the full House and Senate, come up with a compromise agreement between the two chambers, redraft the compromise and pass the conference report. Add in the need for transition rules, which took a year to draft when the 1986 tax act was adopted, and it’s ludicrous to think that tax reform has any chance of going anywhere during the lame duck.

Keep in mind this is the wrong frame. The issue is whether Congress will decide to renew EXISTING initiatives, not fundamental tax overhaul (in fairness, Collander predicts that stopgap measures are all that will result). Tax maven Lee Shepperd points out that a surprisingly large portion of the tax code is renewed every year, and she is sanguine about the fiscal cliff turning out to be a non-issue.

But as we so far away from business in usual in DC that all bets are off? The Republicans are keen to cut the deficit, or at least like to pretend to be, and if the economy is more or less where it is now or a smidge better, they’ll certainly be champing at the bit to drop the extended unemployment benefits. The Dems would posture that they’d want different breaks eliminated, such as ones like the Bush tax cuts that would hit the well off more. Normally, the expected resolution would be simply to extend the whole shebang, since neither side would give up its half a loaf. But this is a Congress already beset by intransigence, and lame-duck sessions aren’t great for rallying the troops. And on top of that, the budget ceiling will come into play, which will further complicate agreeing on stopgaps.

The lack of focus on the issue in Congress is not a good sign. As Sebastian Mallaby writes in the Financial Times:

….the omens are bleak. Rather than seek a mandate to eliminate tax loopholes and discipline health spending, which are the two central components of any intelligent budget fix, candidates on both sides resort to sound bites

The better way to frame this might be: will all the talk of grand bargains get in the way of some fixes to keep the US from unwittingly going the austerian route? I’d hazard it is too early to tell. While Congress can often squeak legislation through just before deadlines, the ascendancy of the deficit hawks may mean the non-fix is in.

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53 comments

  1. Christophe

    Yves, this is uncharacteristically optimistic of you. Do you really think the “recovery” won’t sputter out and collapse before making it to the fiscal cliff? An awful lot of brewing crises will have to be kept under control for the next eight months if the “recovery” is to make that suicidal leap come January. On the other hand, bubbles do have a way of staying afloat.

    1. Yves Smith Post author

      Nah, I’m just trying to look at this in isolation.

      Europe is the obvious more immediate risk, and even if they don’t go into full blow crisis, the US and European economies are more integrated than most people realize. And I’m amazed at the housing cheerleading. Case Shiller reports prices down in 16 of 20 markets, but you have the WSJ reporting on super tight rentals in some of the stronger market. This is all very useful reporting as the banks are gearing up to do more foreclosures and maybe unload some real estate rather than keep borrowers in zombie land.

      Iran is another huge risk. Netanyahu may be nutty enough to attack and I can’t imagine we wouldn’t support him even if we were/are trying to rein him in. That would spike oil higher and do wonders for the economy. I don’t see that as more than 25% odds, but 25% is still way too high.

      1. chitown2020

        If the crooks don’t have the notes they don’t legally own the mortgage. That means the notes and mortgages are rendered a nullity. As far as I’m concerned the pretender lenders were the borrowers of my signature and my note and they oversold interests in my note and my signature into insolvency without my knowledge. Fraud anywhere in a legal contract voids the contract. I will settle for no less than clear title and every American should demand the same. Their debt fraud is a QUADRILLION dollars and can never be repaid no matter how much property they are allowed to steal. The banks are the Zombie debtors who need to be buried.

        1. Jim A

          Everybody has an opinion. Appeals court judges have opinions that matter. The rest of us, not so much.

      2. Waking Up

        Don’t worry Yves, President Obama has the solution. As Jane Hamsher states, “The White House wants to fast track the Trans-Pacific Partnership (TPP) “free trade” agreement with Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam. Japan is waiting in the wings, Canada and Mexico want in, Taiwan has announced its intention to meet membership requirements and China says it will “earnestly study” whether to seek entry into the agreement. Basically, the TPP is NAFTA on steroids. The White House wants to reach a deal prior to the election because they know all the apparatchiks feeding on the $1 billion in Obama campaign money flowing through the system will launch tribalistic attacks on anyone organizing against it (activists, labor unions, workers) for “helping Mitt Romney win” — thus facilitating its easy passage.”
        See what the repercussions of this will be:
        http://fdlaction.firedoglake.com/2012/04/27/what-foreign-corporations-will-obama-empower-to-undermine-environmental-laws-near-you/

        1. Fiver

          Wall Street’s installation (twice) of Obama is hands-down the most lucrative decision they ever made.

  2. McQ

    If Romney wins, the GOP may suddenly re-embrace the Cheney Doctrine (“deficits don’t matter”). In which case–Voilla!!–problem solved.

    1. F. Beard

      If Romney wins, the GOP may suddenly re-embrace the Cheney Doctrine (“deficits don’t matter”). McQ

      Yep, as long as those deficits are borrowed, rather than spent, into existence.

      “We owe it to ourselves” really means those who pay taxes (everyone either directly or indirectly including the poor) owe it to the banks and rich.

        1. F. Beard

          But deficits do not require borrowing; the new money should just be spent into existence to eliminate the confusion about the national debt and to eliminate the fascism of taxing the poor to pay the rich and banks risk-free interest.

          1. F. Beard

            Well, a deficit is defined as spending MINUS revenues but in the case of a money issuer the term is misleading since for a money issuer a deficit is often necessary and good.

            So I reckon a more accurate term would be “Government money supply increase.”

  3. chitown2020

    Bloomberg reporting COSTCO is going to start doing mortgages. That should be all the proof that we need that the FED are disguised as banks who are disguised as Corporations. Everything is a front for a bank. We are living in THE UNITED BANKS OF AMERICA! Holy Megaopoly!

    1. falun bong

      Seems to me that debt is a dangerous product that needs to be highly regulated, like tobacco. Of course banks are dying to offer it: Here’s some money, and you have to pay some money to get that money (the down payment), then you pay more money (the interest) or else I get all of your money (the collateral). And if your collateral lost value I’ll get even more of your money (through bailouts) to make up the difference.
      No wonder these guys can drive all the fanciest cars and buy all the best politicians.

      1. chitown2020

        Of course there is the credit default swap insurance money too..OMG…On our commercial property the mortgage was for $500,000.00 and the bank has the mortgage recorded for $1.600,000.00! They have taken greed to a whole new level. BTW, the mortgage note says that it would be paid in 2012. It was a 30 year fixed. It is creepy. I really feel like that proves this was all planned or else I have entered into the twilight zone.

    2. F. Beard

      THE UNITED BANKS OF AMERICA! chitown2020

      You got it! And since Alexander Hamilton, I reckon.

      1. chitown2020

        They are a giant house of cards because they are too big. I remember in the movie TBTF the head of GE complaining to Paulson that if the bailouts did not happen they would be out of business. That is why they need to be broken up. 5 corporations controlling everything is absurd.

  4. Mogden

    We should be so lucky as to have some so-called austerity. Far more likely: can kicking, short term thinking, and ultimately a massive detonation of public finances.

    1. chitown2020

      FED MONETARY POLICY and QE along with hypertaxation and rising costs is austerity. They are sneaky liars and don’t have the balls to call it that. There are still enough people making money and who have credit so that is how they are pulling this off. Those people are lulled into a false sense of security and don’t believe they could lose it all. Little do they know they are just one job loss or business loss away from impoverishment. These globalists are a thief that comes in the night. Just ask the millions who thought this could never happen to them. 47% percent of the country are on food stamps. Now that should be a wake up call. The horror stories abound. I personally know of 3 suicides. One was a successful homebuilder who blew his brains out and left his triplets daughters fatherless and broke. That is why I can’t stomach these media idiots on the financial channels laughing and joking while their fellow man are being taken to the cleaners for the fraud of the greedy.

    2. F. Beard

      If a can can be kicked indefinitely then why is it necessarily bad? We are doomed to die but is it “can kicking” to avoid an early death?

      And don’t be eager for hard times; especially for others. If austerity is unnecessary and even counterproductive but you impose it anyway what does that make you?

  5. LeonovaBalletRusse

    Will there be co-operation in Congress? “Not bloody likely,” given this news from the Guardian:

    “Democrats condemn GOP’s plot to obstruct Obama as ‘appalling and sad’,” by Ewen MacAskill in Washington — http://www.guardian.co.uk — which relates that during “a private dinner of House Republicans on inauguration day in 2009 … the senior GOP members worked out a plan to repeatedly block Obama over the coming four years to try to ensure he would not be elected.”

    “Attending the dinner were House members Eric Cantor, Jeb Hensarling, Pete Hoekstra, Dan Lungren, Kevin McCarthy, Paul Ryan and Pete Sessions. From the Senate were Tom Coburn, Bob Corker, Jim DeMint, John Ensigh and Jon Kyl. Others present were … Newt Gingrich and the Republican strategist Frank Luntz, who organised the dinner and sent out the invitations.”

    “The session lasted four hours and by the end … they had conceived a plan. They would take back the House in November 2020, which they did, and use it as a spear to mortally wound Obama in 2011 and take back the Senate and White House in 2012, Draper said.”

    “Copyright 2012 by Guardian News and Media Limited or its affiliated companies. All rights reserved.”

    These are excerpts, mostly taken from a BOOK mentioned in the article. Please read the entire piece at:
    http://www.guardian.co.uk/world/2012/apr/26/democrats-gop-plot-obstruct-obama

    This news is crucial and urgent. Will we hear it from network/cable news?

    1. chris

      …and obviously, The GOP did not need to worry about obstructing Obama, as he graciously gave them most of what they’ve always wanted – and end to FDR’s New Deal liberalism. Taking the Clinton doctrine (rubinomics) several steps further, Obama out-neoliberaled them all.

    2. chitown2020

      They just don’t give a damn. They sold their souls for the false comforts of this world. Their owners have no souls because if they did, there would be no poverty and homelessness or people dying from curable diseases. They have no intention of singing kumbaye with the peasants they created. They hope that 90% of us die broke and homeless. The biggest threat to America are the traitors from within.

      1. ECON

        “The biggest threat to America are the traitors within”. T. H. White predicted in the early 1960s that the USSR would melt away as it did beginning in 1989. His thesis was that empires crumble from within as the objective conditions of the citizen and the duplicity and corruption of the governors take hold, some without violence and others not.

        1. chitown2020

          ECON….I believe that was Alinsky’s theory in his book Rules for Radicals. My local news reported about a year ago that book is supposed to be Obama’s Bible.

    3. lambert strether

      Shocked, shocked. What a non-story. ZOMG!!! The Rs held a strategy session! Over dinner! Reach me my pearls, maw, I’m a-headin’ fer the faintin’ couch! As if the Ds didn’t play the same games, also to our detriment.

      The real question is why the D administration was so “weak” in their riposte, when everybody knew what the Rs are; this is, after all, the party that impeached Clinton over a —- —.

      I suggest that the reason is not, in fact, that the D’s are “weak,” but that they are happy with the policy outcomes — for example, permanently high DISemployment — and that they, and the Rs, are in complete accord on them.

      Free yourself from the idea that the Robama vs. Obomney contest has anything to do with responsiveness to the electorate, or public purpose, and matters become more clear.

      Look! Over there! Battleground states!

      NOTE Cleaned up….

      1. diptherio

        No, that’s just politics. It was well known in 2009 that the R’s strategy was to obstruct the Administration’s goals and drive the country off a cliff to make Obama look bad. No news there, as Lambert points out. The (somewhat) unexpected part was how EASY the Administration made it for the Rs. Usually, you go into a negotiation demanding more than you expect to actually get. The Obama Administration, reversed this logic and, on practically every matter of substance, began negotiations demanding less than even moderates had hoped to obtain. And then, of course, compromised those already weak demands even further, in the name of bi-partisanship.

        1. different clue

          Leading a few tinfoily people like me to suspect that creatures like Obama and Pelosi and etc. are secret Republican moles within the Democratic Party.

          “Impeachment is off the table” will go down in history as
          Pelosi’s “Ford Pardons Nixon” moment.

  6. Hugh

    It’s an election year and incumbents usually do just enough stimulus and can kicking to get the economy through the election. That’s the theory anyway. It didn’t work so well in practice, however, in 2008 when we saw the meltdown in September.

    This time around though both parties have come out clearly as being anti-99%. We should expect that after the election as well. We will have austerity no matter which party wins the White House, but it will be austerity for the 99%, not the 1%. I mean even if the Bush tax cuts lapse, so what? The rich have made trillions off them over the last decade. They will only go back to paying at the low rates that they had before the cuts. Meanwhile extended unemployment benefits are already being reduced at the state level. I think that is the pattern we should expect. Even if the rich are seen to take a few “hits”, most of the pain will be at the expense of ordinary Americans.

  7. Wyndtunnel

    The only light at the end of the tunnel that I can perceive with the Eurozone and its seemingly suicidal insistence on austerity measures is that the experiment is giving us empirical evidence of the consequences. Though fraught with risk if the Eurozone does break up, either partially or fully, the fallback position is one to cultural lines that are at least familiar to all.

    The U.S., on the other hand has followed a path of haphazard and mostly misguided stimulus (i.e. stimulus for the kleptocrats and austerity for everyone else) and entrenched itself into a brutal culture war. The apparent calm and business as usual in America is simply a pause. The real fireworks have yet to happen.

    My money is on Europe to figure itself out. It’s just a gut feeling. Perhaps because, despite all the fear mongering from the extremes of the political spectrum one gets the feeling living here (I’m a Canadian who moved to Switzerland last summer) that the population across the board is much better informed than their North American counterparts (including Canada) and that the Governments ARE being held to account…for better or for worse. If that means the breakup of the Eurozone…well so be it. Then Europe can start re-balancing itself while Washington burns.

    1. James Cole

      I doubt anything that happens in Europe will silence the calls for austerity in the US. The people doing the calling are immune to empirical evidence.

    2. LeonovaBalletRusse

      Wydttunnel, Switzerland is one of the “stretch limousines” Robert D. Kaplan wrote about, when he “predicted” the future in his article, “THE COMING ANARCHY: How scarcity, crime, overpopulations, tribalism, and disease are rapidly destroying the social fabric of our planet,” published in The ATLANTIC MONTHLY in February, 1994. He later expanded this into a book.

      Do you wonder how Robert D. Kaplan knew this would happen? Are we to consider him a prophet, or something else?

      Follow the money and the DNA. Who profits, who pays? Cui bono?

  8. rjs

    there’s a slope before the cliff; everyone seems to have overlooked the new formula for termination of unemployment benefits…a 10% decline in the fabricated U-3 rate has already cut off 15 states, including SC with a U-3 rate of 9%…and california’s long term federal unemployment comp terminates in May, despite an 11% unemployment rate…

    1. chitown2020

      When the food stamps get axed then there will be the bread lines and soup kitchens and anarchy. I know a family who has been unable to find work and Chase has been slowly lowering the measly amount they get. One of them just found a part time job so they aren’t so terrified anymore. I just cant believe the conflict of interest. Chase fraudclosed on them and Max Keiser reported Chase doles out the food stamps to the peasants they helped create. Its sadistic.

  9. chitown2020

    Didn’t Geithner say a while ago that we are not that heavily invested in Europe and that Europe doesn’t pose that big of a risk to the U.S. economy? It looks to me like some are trying to create a reason for our collapse that they are manufacturing as we speak. We are capitalizing the foreign banks around the world and have been ever since the crooks collapsed the stock market in 2008. I agree with Kudlow that the Globalists are leveling America like they did to Europe and the result of this ongoing bailout of the World Banks by the FED will be the complete bankrupting of the American people. Kudlow is one of 3 that I see on the financial networks who ever expresses outrage at what these Globalist hogs are doing. Don’t these media people realize this effects them too? With the exception of Anderson Cooper who is a Vanderbilt, these media people are probably not ridiculously wealthy. They should not be so loyal to their paychecks.

  10. Brooklin Bridge

    Both parties are equally interested, foaming at the mouth interested, in privatizing Social Security and Medicare. Neither party will ever have such an auspicious opportunity to do so as via a second term of Obama the Trojan Horse.

    Along with Obama’s re-election, the individual mandate is the centerpiece for that plan to get it’s underpinnings the way the owners want. That will become clear this summer when the Supreme Court, quelle surprise rules in favor of the constitutionality of forcing citizens into the profligate embrace of private enterprise.

    1. LeonovaBalletRusse

      “Financialize Social Security! Turn on the taps! Laissez les bons temps rouler!”

      It’s High Paaarty Time for the Global 1%, and guess who’s to clean up the vomit?

      1. chitown2020

        What defies logic is no one ever asks where all of the money went? The 401k money and the other investments as well. POOF!!! and it was all gone? IMO, that is unacceptable. Like the $155 billion dollar property tax increase that ex- Chicago Mayor Daley said is going to happen in Cook County by the year 2015 in order to make up for all of the “missing” policeman’s and fireman’s pension money. Gov. Quinn of Illinois announced today he wants teachers not to be able to retire until the age of 67 instead of 60 to save medicare. Looks like it is time to figure out where all of the “missing money” went and make those who made it go “missing” put it all back.

    2. Lambert Strether

      Well urged. After all, after they force us to buy private health insurance (giving the rentiers a cut) they can end Social Security and force us to buy retirement accounts (giving the rentiers a cut).

      Then, after they take their cuts, they can steal our accounts as well.

  11. financial matters

    The banking/govt duality in the US has been screwing over Europe since WWI and strengthened it’s unfair advantage with the IMF and World Bank after WWII and then again when going off the gold standard in 1971 in order to deal with it becoming a major deficit country.

    The basic structual problems of balance of trade were never addressed. The game has appeared to have reached its endpoint and more people are starting to understand that money is flowing to the financial/govt elite rather than and at the expense of the populace.

  12. DP

    I think Jeff Gundlach, one of the top fixed income managers around, summarizes things pretty well here.

    http://www.investmentnews.com/article/20120424/FREE/120429968#

    The U.S. is scarcely better off. Median real incomes have been flat for several decades, while the household share of the national debt has increased from roughly $20,000 to $84,000. Labor participation rates are falling for every age group other than those over 55. Government spending on defense, health care and social security has exploded.

    Mr. Gundlach also pointed out the “coincidence” of the explosion of debt in the U.S. since 1980 and the widening wealth discrepancy.

    “I see problems between the haves and have nots in the U.S.,” he said, noting that the top 1% of Americans’ share of national wealth increased from 8.9% in 1976 to 23.5% in 2007. “This may be oversimplifying it, but it looks like the U.S. borrowed a whole lot of money and gave it to rich people.”

    Mr. Gundlach said he was in favor of the so-called Buffett rule and suggested that the 13% effective income tax rate paid by Republican presidential candidate Mitt Romney’s will be a problem for him in the coming election.

    Mr. Gundlach derided Treasury Secretary Timothy Geithner’s recent suggestion that the success of the next phase of crisis response depended on Europe’s willingness to employ the tools and resources at its disposal. “What are the tools and resources he’s talking about?” he said. “How do you shore up a debt problem with more debt?”

  13. Sir Dickie Ticker

    Here’s a solution – stop funding a global, gulag empire and divert funds from military and corporate welfare into sustainable development for the real economoy. Of course, the very idea that US ‘conservatives’ might actually consider restrictions on arbitary state violence, unlawful use of force, and providing an endless free lunch for arms dealers and their bankster buddies is beyond the political pale. Better to pretend you’re a ‘deficit hawk’ while cuddling up with Lockheed Martin at the public trough. How these people keep a straigh face is beyond me.

  14. Rodger Malcolm Mitchell

    “Rather than seek a mandate to eliminate tax loopholes and discipline health spending, which are the two central components of any intelligent budget fix . . .”

    WRONG. There is no known mechanisms by which tax increases (aka “eliminate tax loopholes”) and reduced (aka “disciplined”) spending can help an economy. The more budgets are cut and taxes increased, the weaker an economy becomes. Period.

    Those who do not understand Monetary Sovereignty do not understand economics.

    Rodger Malcolm Mitchell

    1. LeonovaBalletRusse

      For another point of view on http://www.youtube.com see:
      “Capitalism is The Crisis (Full Movie)” – uploaded by CapitalismCrisis on Aug 9, 2011 —
      full title: “Capitalism is The Crisis: Radical Politics in the Age of Austerity” features “original interviews with Chris Hedges, Derrick Jensen, Michael Hardt, Peter Gelderloos, Leo Panitch, David McNally, Richard J.F. Day, Imre Szeman, Wayne Price, and many more!”

      http://www.youtube.com./watch?v=fYFw3O–2R0&feature=g-vrec&context=G274e088RVAAAAAAAACw

  15. PQS

    Any “recovery” is so fragile as to be eggshell thin, IMO.

    What I’m seeing in construction is a very, very small uptick, but the problems with lending, oversupply in some markets, and just too-cautious Upper Management are thickly overlaid on any upticking.

    As my demo sub said to me, “This whole country is on lockdown.”

    Which I’m sure is just how the 1% like it. And, given that I bet there aren’t a dozen people in Congress who actually understand economics, much less want to do anything about it, I can’t see anything real happenening until a major, major crisis starts to brew. (Iran, Israel, another attack, etc.) I will be interested to see the fate of the TPers, though. I think there must be a ton of buyer’s remorse out there over that crowd, which promised jobs and has spent two years braying about abortion.

  16. Fiver

    Fall off the fiscal cliff? Nope. Don’t see it happening. Not even sort of. Even if Reps manage to eek out a win in the House, Obama is going to bury Romney (in a record low turnout) and the perception (with MSM in overdrive) will be that Reps have been chastened and should thus be compliant, which indeed will be true – sort of.

    Reps will certainly become “more responsive”, “more reasonable”, more interested in “bi-partisan efforts on behalf of the American people” and all the rest. It will of course be complete and total bullshit, as usual, on both sides of the aisle.

    The money-tap is going to be opened up full 1 more time in 2013. Reps will focus on steering spending to all the wrong pockets, not thwarting it. They will revert to pure dealing, not no dealing. Look forward to more acts of predatory genius like the historic Health Care bill written by the industry, enormous tax breaks or other subsidy for energy “security”, that sort of thing – oh, and anything that smells like a possible war. Get ready to put heads into bags, O Dems and “progressives”, while Bernanke and Obama finally get that bubble going. Anyone serious about real sustainable progress will have to suffer the false dawn on the next couple years en route to the last chance for a real challenge to the Wall Street/Washington elite in 2016.

    The “far right”, like The Dwarf, has been put back into its cage after a brilliant performance – the greatest political diversion from the real issues and real threats ever pulled off.

  17. Lafayette

    NO QUICK FIX

    It is entirely possible that, yes, indeedy, nothing can be done till well after November.

    For all the ranting about the banksters, nothing will change them without external intervention to regulate the Finance Market. That too will not come if Romney is elected and we have reason to doubt it will happen even if Obama is elected.

    Unless there is some unforeseen “externality”. For instance, instead of bitching-in-a-blog Americans have a sudden epiphany and get the T-Party (T for Troglodytes) out of Congress. More than that, however, is a sea-change in Congressional mentality that would occur were the Progressive Caucus increased significantly above its present 20% of both Chambers (but almost entirely the HofR).

    That will likely not happen in one fell swoop. But it is apparent that Trickle-up Reaganomics is coming to its well-deserved end. The question is not how, but when.

    SO WHEN?

    The longer America waits for the Rabid Right to be defeated convincingly the later economic recovery will occur. The profound reformation of both market oversight regulation and our electoral system (opening the door to either a progressive third-party or a progressive takeover of the Democrat Party), could shift the American economy to a higher plateau.

    The real issue is public sentiment that seems to want to disown the present electoral system lock-stock-and-barrel. Then wipe the slate clean and start anew. If it adds progressive voices to Congress, so much the better.

    Meaning it would get America started to addressing the Great Income Disparity from which it suffers.

    But there is no QuickFix to the myriad problems that have caused this country to tumble into a yawning abyss. The Gridlock in LaLaLand on the Potomac must end definitively for any solution to take form.

    And that can only come from the ballot box.

Comments are closed.