It's too bad we no longer carve our records in stone, like the Mayans did. What will be left of our modern society to be found 5,000 years from now that will chronicle our economic downfall? A few scrambled electrons stored on a format that cannot be opened? Maybe some grad student will earn a PhD someday by explaining what "tweets" were all about.
Can you imagine the beings of the future reading our media accounts of Boehner and Obama? Which will they think is accurate? Fox News or NPR?
In the 24-hour news cycle, we seem unable to put anything into perspective. Everything is a crisis. And the crises never stop coming. Earlier this year our economy was being ruined by the people in Greece and Italy causing the European Debt Crisis. Then our economy was being ruined by the "superstorm" Sandy. And now our economy is being ruined by the fiscal cliff.
So here's the "crisis." The richest people in America face a 3-point bump in the top tax bracket, from 36 percent to 39 percent. The middle class faces paying the taxes they had been paying for decades before Congress started giving away the store. An estate tax that had existed for years will come back. How ever did America survive the 1990s? Much less the booming post-World War II era, when the top tax rate was as high as 90 percent!
From a practical perspective, the tax and spending changes that will come from the fiscal cliff have been known for many months. Precisely known. There's no guessing here. The tax rates will go up exactly as threatened -- and not a single percentage point more. So we know the worst-case scenario. Isn't that the opposite of insecurity and unpredictability?
But we are being told that the business world that oh-so-craves predictability just cannot possibly handle a few percentage points of change to the tax rates -- taxes that overall rarely account for more than 25 percent of their budgets. Businesses deal every year -- no, every week, sometimes everyday -- with fluctuations in supply costs, labor costs, foreign exchange rates and all sorts of things that have far bigger impacts to their bottom lines. And these issues are addressed without the world coming to an end.
So take a deep breath, folks. Relax. People still need food, clothing, shelter, medicine, transportation, entertainment, etc. Investors will profit nicely from the businesses that do the best job of serving those demands. Absolutely...regardless...of...tax...rates.
And besides, chances are high that we won't really get to the already clearly-known worst-case scenario. Any deal that gets done, any deal at all, will produce less of an immediate impact than "sequestration" will create on Jan. 1.
And by the way, if sequestration happens, the budget deficit will be reduced by more than any fix currently being discussed. Wasn't reducing the federal deficit the whole point of these budget bru-ha-has? Yet suddenly, reducing the federal deficit will guarantee a return to recession. Interesting.
Wanna know the amusing part? As soon as the pols save us from the fiscal speedbump, the media panic machine will go right back to the Eurozone crisis creating uncertainty. Or the never-ending unrest in the Middle East creating uncertainty. Or something about China. Or goofy North Korea blustering about missles that don't actually work. And then back to the American housing crisis. Or gas prices. Or the weather.
Which Chicken Little should we listen to? How many times can the sky fall? Wait. Isn't that a James Bond movie?