The deepest irony in the current situation is that the real, but slight, danger of the “cliff” is that in the long run it will further deepen the current recession by means of automatic austerity measures (tax increases and spending cuts), whereas the strategies being generally touted to deal with this danger are more austerity measures (revenue increases and spending cuts).
In other words, the dominant political consensus driving the hysteria in Washington right now is that deliberate austerity measures must be urgently enacted in order to stave off the catastrophic effects of automatic austerity measures.
Do you get the feeling that something doesn’t smell right here?
Could this be another example of the dictum, “Never let a good catastrophe go to waste?” (And if the catastrophe doesn’t occur on its own, create one).
Cui bono? Who benefits from the fake catastrophe?
This is beginning to smell like that old campaign (put into high gear by Ronald Reagan) to turn back the New Deal by attacking what are called “entitlements.” And, of course, the perennial campaign to reduce the “tax burden” on the 1%.
I agree with Bernie Sanders (and Galbraith doesn’t mention this) that the only people who really face a short-term crisis from the over-hyped “fiscal cliff” are those who depend on the timely receipt of their unemployment checks.
Here’s how Professor Galbraith explains this phony crisis: