Fiscal Cliff Scare Talk Follows Shock Doctrine Script

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23. America on the edge of a 'fiscal cliff'? No, it's the right peddling scare stories

http://www.guardian.co.uk/commentisfree/2012/nov/12/america-fiscal-cliff-scare-stories


Americans are not about to have a collective Wile E Coyote moment, paddling furiously in mid-air. Photograph: Warner Bros/Everett/Rex Features


The morning after Barack Obama's re-election, panic broke out. Radio 4 described financial markets slumping on worries over something called a "fiscal cliff". The New York Times, normally drunk on its own sobriety, warned of a "looming fiscal crisis". Other newspapers and TV networks predicted an economic "abyss", "peril", even "imminent armageddon". And that was before you got to the blogs.

The clock is ticking, apparently. Obama has until New Year's Eve in which to strike a deal with the Republicans – otherwise nearly 50 tax cuts will expire and the defence department alone will get slapped with $1.2tn in cuts. Unless the Democrats give the Republicans what they want in the form of further tax giveaways for the richest, the senator Mitch McConnell and his rightwing allies will block any attempt to extend borrowing – with disastrous economic consequences. It sounds like a budgetary version of the film Speed; but this is the fiscal cliff Washington is driving off. And the result will be another recession in the US (and, more likely than not, around the world, too) and soaring unemployment. No wonder ABC News calls it "taxmageddon".

There is just one problem with this version of events: it's exaggerated. Distorted. More spiced-up than a bargain balti.

For a start, the very term is wrong. Even if the most bloodcurdling predictions are borne out, there will be nothing cliff-like about 1 January 2013. Americans are not about to have a collective Wile E Coyote moment, in which they suddenly find themselves paddling furiously in mid-air – before the inevitable descent begins. This isn't a cliff-edge at all; it's more of a slope.