The fiscal cliff

On the edge

What the cliff means, and why America’s deficit woes are so intractable

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Readers' comments



OptimistSkeptic in reply to hedgefundguy

- Whatever wealth any person possesses is a piece of the puzzle. Personal 'unfunded liabilities' are the net of expected income less current and future liabilities. Few people given lifetime projected earnings have 'unfunded liabilities' as evidenced that few die net indebted. Same methodology was applied by Medicare and SS Trustees, tax revenues versus forecasted commitments. The numbers are non-trivial, concerning, and indicate need for action.
- This Time is not different. That's the problem. The fundamentals of economics have not been repealed. What is not different is the U.S. sovereign debt and liabilities exceed the ability to pay. Things are not the same as in the past. Practices of the past will no longer work, best articulated by Bill Gross and Noriel Roubini (as well as Rogoff & Reinhart). This is a new reality, one that requires new thinking. 'We can't solve these problems with the same quality of thinking that created them' (paraphrase).

teacup775 in reply to hedgefundguy

But to have any of that money, we'd need to see growth more or less we've come to expect.

Doesn't work well when no one can with lopsided prosperity, you're either poor or rich, and not much goes into the tax pot.

hedgefundguy in reply to OptimistSkeptic

How much money do you have in the bank?

Enough for food, clothing, and shelter for the next 20 years?

If not, then you yourself have an unfunded shortfall of your future liabilities.

The same could be said for the WSJ.

and tax loopholes for just about everyone (except those who are rewarded via a standard salary).

The WSJ wants "tax reform."
We had tax reform in 1986.
Rates went down and loopholes closed.

What makes anyone think that "This Time Is Different?"


Pascal Von Holden in reply to ajain31

Didn't Obama only get 51/52% of your vote? That doesn't sound like an overwhelming victory mate.

The problem in your country is your tax system is way too complex and has too many entitlements and rights for certain people.

You need a simple three step PAYE Income Tax, that's right one income tax, taxed at the source, much easier to administer and check. It would mean you would save heaps by closing loopholes, cut down your bloody IRS, and have no tax rises all while collecting more efficiently and effectively.

All a GST/VAT tax would make more sense.

But far be it for a non-American to try talk sense to Americans...

Puntmeister in reply to Paul Marks

For someone who gripes about Obama's supposed hatred of the capitalist United States, you seem to hate a good number of American people, American groups, and American institutions (like the US Government) yourself!


If the private citizen had racked up debts of this huge he would have been thrown in jail long ago, his credit taken away and all his belongings repossessed.

WT Economist in reply to Hamakko

A Great Depression is the capitalst/democratic equivalent of a revolution. Lots of paper wealth gets wiped out, along with a lot of institutions. People suffer, but suffer more equally.

They stopped Great Depression II in 2008, but we may have gotten oligarchy instead. I don't doubt that things would have been worse off then without the borrowing and the bailouts of the ungrateful wealthy. I am beginning to wonder if we would have been off just letting the "market work" at the time.

Gabriel Hornblower

Oh, we'll all go over the precipice,
We'll all go over the precipice!
Preci-, preci- piss piss piss!
Preci-, preci- piss piss piss!
We'll all go over the precipice.

WT Economist in reply to Hamakko

Exactly. The Economist represents the perspective from abroad -- please keep selling out your future by buying more than you can afford so we can sell. But then sacrifice to somehow pay us back later!

While the federal government is bankrputing itself, the U.S. as a whole has started to retrench from a 30 year debt binge. You resent that debt binge? Stop selling us (or should I say them) so much stuff.

It was back in the Clinton Administration that an official claimed that the U.S. was being used as the global buyer of first, last and only resort. An economy based on the rest of the world selling goods to the U.S. and stealing intellectual property from the U.S. is not sustainable.


Where's the part that shows why we should give a damn about the debt in the first place? Good lord TE, really doubling down on the fear-mongering this week eh? Makes for better ratings I suppose..

Hamakko in reply to Huey C

Well, except that no-one is being forced to buy US bonds, nor any other instruments of US debt. I'm not lending any of my money to such a profligate spender (of course, I don't need to; they just take it anyway and call it tax...).

Anyone who doesn't want to be brought to his knees shouldn't lend to the US. Perversely, he'd be doing all of us a favor. Call it tough love, or whatever.


I can just notice that M. Obama's hair has turned a lot greyer and his broad smile has turned into a fixed grin in just over a month. I can just assume that the dire economic situation in the USA is greatly responsible for this unfortunate change in his physical appearance. Although, to be honest, grey hair suits him!


I am a Citzen of the United States of America. I love this country. I believed President Obama is doing the very best he can do. He is losing sleep at night. can't be with his family. You all didn't treat President Bush like you are treating this President. We had two wars to pay for one reason the debt ceiling has risen. I am a Head Start Teacher and my job is in jeaody. Because President Bush didn't want the program. I know I heard him on live TV stating he didn't know we were in a recession when the gas went up to about 5.00 a gallon. President Obama need to go on live Television and tell the world what the Republican really want too cut. Most poor people like myself can't hardly afford food to go on our table less on talking about health insuran ce. President Obama can't do it all by himself that's the reason I am speaking out whether it matters or not!!! To rap this consveration up you all better do the right thing and stop worrying about who is the winner here and start worrying about us poor people out here working and still can't hardly make it from one pay check to another one. That's what the President is trying to get over to the rich and famous people. I have been working for over 40 yrs. and really haven't drawed unemployment hardly but 6 mths besides the time we are off for the summer months I said that too say this every black person you all see is not looking for hand outs they just really just can't do better and don't get a chance too speak their opinion. Iam being respectful as I can get . That's what they need to do and give to my President and all of you all President of the United States of America!!!


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