While the "fiscal cliff" is not an immediate economic death sentence, as has been stated...., the negative impacts of rising taxes and sharply reduced government spending will seriously erode economic prosperity. For the average American they will see unemployment rise, the nascent housing recovery fail, incomes fall and their personal standard of living come under attack. The drag on consumption and economic growth will lead to declines in the financial markets further deteriorating the "wealth effect."
This economic pain, combined with a well-planned media campaign blaming the Republican's for their failure in averting the crisis, will fuel the ire of the voters come the next Congressional election. With Republican's lack of adequate messaging, or media support, it is very likely that the majority of House Republicans will lose their seats to Democratic opponents.
"Check Mate"
While this idea is entirely conjecture the end result would be a fully Democratic controlled government. Such a shift in control would ... achieve this goal of:
- Elimination of the debt ceiling.
- Additional stimulus and bailout programs.
- Additional expansion of the social welfare fabric.
- Substantially higher taxes on the "wealthy" to redistribute wealth.
- Greater expansion of Government regulation and control.
- Full implementation of ObamaCare
These goals are not new, of course, as these issues have been at the heart of his administration since he took office. However, it has been the Republican controlled House that has thwarted further expansion of Government controls over the last two years. By forcing the "fiscal cliff" and blaming the Republican's effectively - the block could be potentially removed.
The use of economic pain to expand governmental control of a nation is not a new concept. It has been a tool successfully used many times in history. With an economy that is currently dependent on financial support from the government the only "bad guys" in this situation are those trying to take that support away.
The reality that "taxing the wealthy" does not increase revenue or promote economic growth is lost on the 80% of Americans that are economically uninformed...