Home / Congress / The Real Meaning of the Fiscal Cliff: “We Were All Lying in 2011.”
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The Real Meaning of the Fiscal Cliff: “We Were All Lying in 2011.”

Written by Gary North on December 27, 2012

In August 2011, the House, the Senate, and the President all agreed: taxes on all Americans would rise, and government spending would slow on January 1, 2013.

They signed that law in order to get Republicans to agree to an increase in the government’s debt ceiling.

They lied. They had no intention of raising taxes, reducing spending, and getting closer — marginally — to a balanced on-budget budget. It was all a charade. It was another example of kick the can.

They did not take the law seriously. They thought there would be some last-minute deal to keep taxes lower, keep spending higher, and run another trillion-dollar deficit — maybe even more.

Now they are trapped by their own lie. They cannot get a deal. The scheduled tax hikes and spending slowdown will hit the economy in a few days.

“Oh, woe!” The government is now trapped by its own public relations deception. The promised return to at least the fringes of fiscal sanity threatens to create a recession.

Both sides blame the other for not finding a way to kick the can again. Neither side really expected to go through with this reform. It was all for political show. It was political theater. It was all a charade to fool the rubes back home. “We have a solution to the deficit. We’ll begin to implement it on January 1, 2013. Trust us.”

Trust Congress? To quote Nancy Pelosi: “Are you serious?”

Now they are hoisted by their own gaseous petard. They cannot come to an agreement on kicking the can. They now face the grim reality of their own charade.

Frantically, they take the fall-back position of politics. They point the finger. They blame the other political party. “It’s all their fault!”

The bipartisan agreement of 2011 is now about to go into effect. “Oh, woe!”

Obama wants a fig leaf for abandoning the agreement: taxes on anyone making above $400,000 a year. Boehner wants a fig leaf: taxes on anyone making over $1,000,000 a year. Each of them has snatched away the other’s fig leaf.

They are all naked. “We really didn’t mean it in 2011. We really had no solution to the deficit. We were just kicking the can.”

Now their feet are tied. Neither side can get the other to kick the can one more time.

But give Congress credit. They showed perfect timing. On December 31, the federal government will hit the debt ceiling again.

If they come to an agreement in January, it will be on this basis: “We have agreed to kick the deficit can again. We have no solution.”

If they do this, the stock market will rise. Investors much prefer fantasy to solutions. They prefer kicking the can to balancing the budget.

There is no politically acceptable solution. When the slight signs of a solution are called a fiscal cliff, then a postponement will enable us to climb higher up the mountain of federal debt. Then we will be pushed over the edge by rising interest rates, followed by  hyperinflation, or federal default, or both: first hyperinflation, then default.

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31 thoughts on “The Real Meaning of the Fiscal Cliff: “We Were All Lying in 2011.”

  1. Randolph Rivers says:

    I am sick of any government. It's ALL broken. Time for a humongous tea party.

    • Mr. Rivers, you are singing my song!

    • US Army (retired) says:

      The only difference between a politician and a prostitute is a prostitute has limits on what she will do for money.

    • messcatzoe says:

      It's time for a gathering of determined Americans to remove these fools and replace them with men and women who understand they work for US. It is overdue and we need to combine every single third party to become a true conservative party. TEA Party will support this effort. It is not that difficult to look through the elected politicians and determine the 10% (and I'm being quite generous with that estimate!) who are actual conservatives.

      • Convince the ignorant voters to stop being moronic. Like the sit in dumbos in NewYork parks. or The Blacks that vote color instead of facing reality etc. That seems to be the voting majority. They controlled the electorial college in the last election even when the majority voted somewhat more intelligently.

    • Arthur Descombes says:

      Comment from a guy from Europe:
      We conceive here the TeaParty as people drinking tea and critizing the government who ever runs it. Not favoring any progress. Not taking any responsability, only criticizing. Not imaginable at all, how the States would look like if TeaParty would dominate US government.
      Take only a look at the map of USA. Look from where progress is coming: West Coat, California (the only state who managed to stabilize current consumption in last 20 years while in the rest of USA it increased +50%); East Coast (New York etc). Compare it with result of last presidential vote.
      These are the borders to outside world. They better understand what happens in the world. In contrast, in States where TeaParty have success, rather in middle states and Alaska –> people who rarely have seen an airport –> no seed for progress. Maybe for a better tea recipe.
      Its a shame for USA how the whole political agenda is presenting itself: only fighting each other (fortunately no guns in Senate/House). Have seen recently a ranking of debts of countries. USA is worse than Greece! Effectively, everything will be broken, if you US citizens continue like this. Obama won the race. He is seeking collaboration in the congress. So, support him at max. His proposals cannot be that bad. Early enough to change government in 4 years. And then democrats shall help republicans. But stop destroying the slightest progress. Think rather: Would you REALLY BE ABLE to make it better, alone without support from rest of people?

  2. Rabelrouser says:

    Yes, they lied, and because the average American citizen bought into that lie, well, we are all going to be victimized by our own belief in the politicians to find the answers. This, even though they never do, or never have, or never will. We are stupid enough to keep trusting them to "govern" us, control our lives, tell us when we are right and wrong. We, by our actions have allowed them to continue to be our masters.
    So now, the fiscial future of the government looks bleaker, in as much as they can not spend as freely as they want; that is untill they lie again to us with their new superior plan. The one that only slightly delays the eventual default and subsequent economic crash of the whole nation; everyone will be included, not just the "government".

    • Worse most of our legislators beleive their own lies. Like Old Bummer, Pelosy and Reid. All mentaly dangerous to all Americans.

  3. its time to wake up to the Gov. pulling the wool over our eyes.If and when we the people make the decision to boot the whole bunch out the door and get a new bunch with term limits and very few lawyers. then and only then will we regain control of the Gov.. Both houses and the President are a detriment to our going back to the country we have been in the past. Boys its time now.

  4. Rabelrouser says:

    At that point, the average American citizen will clamor all over themselves begging the "government " to come up with a solution. But hey, thats only because we believe in them to take care of us, because we cant do it ourselves. And thats evident by our inability to learn that the first lie, the Federal Reserve system, was the creator of the problem in the first place. The lie that was told 100 years ago, the lie that gave this private bank control over your life economically, the lie that has sence layered your life, and the economy with a contractual obligation for you to be held responsible for every penny the government borrows and spends.
    So dont just blame the government, but blame yourself for accepting the lies, and allowing this to happen. But you better be ready (prepared) to ride out what is coming; or you can go to the government for their help, and buy into another lie.

    • The Federal Reserve was created by congress. Instead of doing the work congress was created to do they passed it off to for profit bankers. The Federal Reserve Bankers have taken very good care of our tax dollar, They just won't use those dollars for our benefit. Only bankers and politicians benefit fromour tax dollars.

    • Arthur Descombes says:

      I found this a very good reply! See my comment in a reply to Randolph Rivers. You got exactly the point. Citizens have also some responsibility and it is not so easy to govern a country that big as USA. However, I bet YOU are not member of the TeaParty.

  5. jmsmaxwell says:

    Just another day in Washington D.C., Lie, cheat, steal, and give the voters the shaft one more time. Until the American public
    wakes up and quits sending the corrupt to be the leaders this problem will never go away. They are all like hogs at the trough
    rooting to get as much as they can before someone else beat them to it. Unfortunately for our nation we have many in our
    society that are exactly the same as they have become lazy and expecte others to provide for them so they can lay on thier
    backside playing video game, getting fat and not having to work because "Da Man" will just give them "Free Stuff" and send
    them a welfare check and food stamps. .

    • Rabelrouser says:

      Are you implying that our elected representatives are a representation of the people who vote for them?

    • Bill McCroskey says:

      I am not a "religious" person …. but I truly think the end is near … not the wrath of a superior being …. but the wrath of a corrupt society (both morally and fiscally) governed by a much more corrupt group of politicians. You don't always get what you want … but you ALWAYS get what you deserve.

  6. jmsmaxwell says:

    Our nation is what the politican have turned it into. Those American who actually
    get up and go to work each day must carry a larger load ever day to provide for the slothful in our society. We have been
    told to accept Homosexuality, Drug usage, laziness and ignore our religious raising in favor of greed and corruption by those
    who would see our nation in ruins so they can enslave our people and put a dictator in the White House to dictate to us and
    put the chains of slavery upon us. Our school systems have been brainwashing our children since FDR was in office and
    as the years have passed it has gotten worse and worse. Now they want to teach hot to be a homosexual in class rooms of
    young children to corrupt them much like Sodom and Gomorrah from the Bible

    • Rabelrouser says:

      And in so much of the direct corrolation of Sodom and Gomorrah, this nation will also be judged, and collapse, because the people have chosen a less virtious life, and accepted the same in those who they elect to represent them.
      The same was true before the flood, and God decided to take those few who were with virtue and start over, all 10 of them.Man always claims his rights, but gives up his rights for comfort and supposed security, financial or other wise to the biggest and best liar; but we all know who is the author of all lies.

  7. Rabelrouser says:

    “History records that the money changers have used every form of
    abuse, intrigue, deceit, and violent means possible to maintain their
    control over governments by controlling money and its issuance.” –
    James Madison, 1751-1836

  8. David Parker says:

    Says who? I didn't run up any bill and I am not liable to pay someone elses bill. All we the people have to do is start using lawful money and we lock out the government. Start figuring how much silver and gold to accept in return for your goods and services and we can take our lives back. In the meantime, I am committed to the notion that no public servant has jurisdiction over me.
    We got rid of the king and we all became kings way back when. I believe Chisholm v. Georgia was the case.
    An example of things we need to consider to regain freedom is someday all of us removing the government's license plates from our cars . We have a right, not a privilege, to travel on the public right of way as long as we are not in commerce. I am sure we can think of other things we need to do some day to throw off the heavy yoke our servants put on our necks. We simiply need to cut them out of our lives, don't use banks, don't ask permission to work, don't agree to give up rights, etc.
    Sincerely,
    David Parker

  9. Sceptic One says:

    Liars! Crooks! Thieves! Criminals! Traitors! … Pile on the labels because they all fit. Do they not? When will we put some metal in the spine of this country?!? Do we need another Shay's Rebellion? (Don't forget your history .. It failed) The first rule, it seems to me, is to do what you believe to be right and have the principles to stand by your belief. This is classic right vs. WRONG. Not, incidentally, right vs. left. The comment about money, in my opinion, is correct. Convert as much of your assets as possible into REAL wealth. Follow your own heart on this. Is it gold and silver? Is it your personal business? Is it your education and integrity? These are the THINGS you will be forced to rely on when paper certificates prove to be worth the paper (or electrons) they are written on.

  10. the country is about to hit the debt limit again if we can get the republicans in the house to refuse to raise the debt limit it will force massive spending cuts. in fact they should vote to lower it even though it wont happen

  11. There is something wrong with you font lately. Im using firefox.

  12. You believe the politicians in Washington were elected by majority vote. It isn't even plurality vote. What was the last time the corporate newsmedia waited for the votes to be counted before declaring the winners? 1972, forty years ago? Look in the mirror and repeat after Forrest Gump: "STUPID IS AS STUPID DOES!"

  13. Raul from Texas says:

    lT LOOKS LIKE THE TEA PARTY HAS ARRIVED. FINALLY WE ARE TALKING ABOUT A REAL BUDGET. OBAMA AND BOEHNER MUST DO THEIR JOB. THEY HAVE TO LISTEN TO FISCAL SANITY. They are attacking us and taking away our chairmenship positions. PEOPLE , we are but a small minority in Congress. We are working with pennies compared to the Rino Republicans and Liberal Progressive Democrats. Get every nickle, dime, quarter, or dollar you have to spare, and send it in to the Tea Party. We MUST NOT lose our gains. That is their wish. We are fighting huge evil forces We are the ones CHOSEN BY GOD, to sacrifice. God Bless you, and God Bless America !!!!

  14. I'm starting to think that I might as well deal with this and make a profit off of it. I'm not quite sure how to do this but many ideas present themselves.

    The average person on the street allowed this to happen. They cheered on FDR, Harry Truman, Eisenhower, Kennedy, voted in LBJ, Nixon, Ford, Carter, Reagan and so on.

    They could have put a stop to this at any time. They did not. Many sat on their hands. Others accepted the whizbangs who were put in front of us and even gave them money.

    Quite a few today accept the idea of "Something for nothing". They figure, "I breathe, therefore I deserve". Ain't so.

    Yeap, I'm going to look for ways to profit from this train wreck. Better Dollars, Gold or Silver than to weep bitter tears.

  15. The few today who speak the truth are considered "Kooks". Ron Paul first amongst them. I don't agree with 100 percent of what Dr. Paul said but I agree with 90 plus percent of what he says.

    I'm glad that Dr. Paul retired from Congress. He is now free to speak his mind. I suspect he could put all of his speeches and ideas into one sentence "I told you so".

    No house divided can stand and no house over leveraged can function.

  16. When we decide that term limits is the solution we will finally get politicians that will make decisions that are for this Country and not for them to get re-elected or to bring the ‘pork’ back home then we will see sanity return. Until then expect to see more of the same. These people pass laws that impact you and I but not them. They give themselves raises and fringe benefits that we don’t see in the private sector. It used to be that the private sector paid more that any government job but not today. Unfortunately, unions have worn out their welcome. They only want an adversarial relationship with management and will protect a poor worker instead of helping to clean house. Too many people have found that it pays more to be on welfare than to find a job and work hard and be promoted. All of these things have helped to lead to the USA being less that it used to be. I am saddened.

  17. Idylewylde says:

    Actually, I'm enjoying this fiasco.
    "Oh what a wicked web we weave .. etc."
    No one on the Fiscal Right expected a sane resolution .. so, oh well, we get a freebie blasting the Left.
    It's the fanatics on the Left who are staring in wide eyed horror .. and completely stunned … "you mean we were lied to by the Annointed One?"

    And the dance goes on.

    • That's, "tangled web we weave, when first we practice to deceive." I was raised on that quote. It's so true. Liars become entangled in all the lies they've told sooner, or later, but not soon enough.

  18. A big part of the problem, as I see it, is that being a senator or congressman is the greatest gig in the world. It's right up there with movie star or professional athlete. Nobody, but nobody, wants to go back home again after they've seen DC. I don't understand it, hick that I am, but it sure looks to be the case. What we have to do, somehow, is make being a congressman less attractive. But how? The rules for being in the legislature are set by the legislators. Talk about the foxes being in charge of the henhouse! If every senator or congressman conducted himself like Ron Paul did–not even letting lobbyists in his office, not accepting any remuneration besides his salary, not really playing the political games, etc.–we could be sure of two things: 1) a miracle just happened; and 2) we'd have a lot more integrity in Washington. And we'd get rid of the reptile sociopathic power-brokers that fill those halls, and replace them with honest citizens. If we could find 535 of them.

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