Fiscal Cliff “Deal” Highly Unlikely, Grab Your Parachute, Get Ready To Jump



The idea that President Obama and House Speaker John Boehner are going to come to some sort of legitimate “compromise” to avoid the so called “fiscal cliff” is akin to expecting the NFC and AFC winners to come to a negotiated agreement over which team will be the winner of the superbowl.

Image courtesy by DonkeyHotey via Flickr.com

Image courtesy by DonkeyHotey via Flickr.com

In short, we have two parties that have completely opposite viewpoints and objectives, with a lot of money at stake. A compromise is virtually impossible without one team or the other being willing to give up what they want.

There is simply no way that Boehner can give in to Obama on the idea of eliminating the debt ceiling. Obama basically wants a “blank check”, while Boehner pretty much believes that the cure for our debt related ills is less spending and less debt, not more. They couldn’t be farther apart.

It’s interesting to me that both sides can produce a pulitzer prize winning economist who is supportive of their position. So will things be rough either way? Will things go better either way? Who knows? If the so-called experts can’t agree, then who’s to say that going over the cliff is going to be a bad thing or a good thing? It will certainly be bad for some, but will also be better for others. No matter what, all of us will be affected in some way.

There is simply no consensus on what to do or how to do it. Neither side believes that the other side’s plan is the right one. There is no grounds on which to compromise. Either more debt will help us, or more debt will hurt us. Which is it? Maybe it’s time to jump off the fiscal cliff and own the consequences. At least we can stop kicking the can down the road. If we’re going to have another recession, bring it on. If we’re going to see things improve drastically, bring it on. It wouldn’t be the first recession we’ve had and it won’t be the last.

There can be no compromise that does not involve one side or the other giving in on major principles that they strongly believe in. Obama has the White House for 4 more years, but the same voters who sent Obama back for a second term, also sent back a majority of republican representatives, thus allowing Boehner to hold on to enough power to continue to hinder the Obama Administration. Maybe the voters are more willing to go over the fiscal cliff now, rather than later. Perhaps the voters understand that you can’t spend more than you are taking in, without getting into big trouble sooner or later. At least that is how life is for the voters, regardless of the niceties of government accounting methods, which are illegal for voters, who must live in the real world.

As the end of the year approaches, we all know that, where government is concerned, there is never any real progress to be made. For them it’s all about finding a way to cling desperately to the edge of the cliff, while pretending that everything is OK – at least until the next crisis comes along in 2 or 3 months. The sequestration plan we see before us IS their version of a compromise. A compromise that they came up with as a result of their total inability to agree on anything else.

I say it’s time to grab your parachute, get ready to jump and let’s get it on. If Obama and Boehner have the guts to let sequestration happen at least we’ll find out what it’s like to start cutting the debt that everyone agrees has to be cut. That in itself is the only real compromise that we can look forward to.
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Donna S. Robinson is a real estate investor, author and residential market analyst located in Atlanta, GA. Follow her on twitter at donnaconsults. Her latest book, Basics Of Real Estate Investing is now available on Amazon.

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