The President is fond of pointing out that the math doesn’t add up on certain topics, where it serves him to pretend the problem is pure math. After all, math doesn’t lie. But just as guns don’t kill people (people do, and usually without using guns), liars exploit math to support their lies. It works because most people are neither mathematicians, nor interested in politics, They want the nation’s business to be conducted sensibly and honestly, and many have given up on getting that. A symbiotic relationship with government that mildly lined the political pockets is tolerable, though not preferable. Sadly, many politicians have become parasites who kill their host.
So the President claims that taxes have to go up, and that revisions to the tax law will do that. But he wants revisions that extract more money from people who have more money in the first place. These same people have access to a plethora of ways to escape the taxes by investing in government-protected loopholes. “Tax-free bonds”, anyone? They might be poor investments on their own merits, but tax laws make them more appealing. If nothing else, an investor might lose less by such investments than if he selected opportunities that brought in more money.
Since people have some amount of free choice, the government continues to tweak its legal infrastructure to get what it wants. I doubt it really wants money. It puts the money into exercising more control of people and their decisions. If it could have total control without the money, I suspect it would lose interest in the money.
So the fiscal cliff is about how the control is to be exercised. Conservatives, or Republicans, tend to think more revenue will be received from taxes if there are lower tax rates and fewer loopholes. Liberals, etc., tend to think that the majority of people are so selfish that few will care if “rich” people have to part with more money and will be (a) happy it isn’t them, and (b) maybe realize that the very rich are going to legally evade the laws through loopholes anyway.
Either way, government wants to control you. The fiscal cliff is a whole lot of sound and fury signifying nothing. Sure, some people will pay more in taxes, and it won’t be the rich. It will be small businesspeople who can’t afford expensive tax lawyers. It will eventually be the middle class, and even the poor. Sales taxes will increase, and people will buy less. Smaller sales volume leads to smaller production volume, and fewer people needed to support production. Fewer people needed means fewer jobs, and more unemployment, and more people giving up and leaving the workforce through early retirement and disability.
The fiscal cliff can be survived, and we will adjust. We will buy less, and make it last longer. Durability of goods will become important again, perhaps. But the government will not get the revenues it claims the law will bring because people have choices. And government shows no sign of slowing its spending, so its “need” grows.
The entitlement cliff, now, THAT’S a cliff!