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richard moody jr

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Is the fiscal cliff the first in a never ending series of crises facing America?

Can we really address the fiscal cliff without addressing our structural problems? We have a ballooning deficit that will result in a very real loss of discretionary spending by the middle and lower classes as more money goes to pay the interest on the debt. If our credit rating drops the cost of borrowing will increase dramatically exacerbating the situation.

More advanced medical procedures will result in a greater strain on Medicare and a higher percentage of our income going to health care---meanwhile Medicare is going bankrupt; we must either raise taxes, curb benefits or balloon the deficit. Add to this the grey "tsunami" rampant autism and obesity and healthcare costs can only rise dramatically.

Cheap carbon fuels, coal and natural gas will add to climate change. Water battles between states are apt to increase as population increases but the water doesn't.

A nuclear Iran, a rising China, and the persistent threat of terrorism will sap our resources and our will.

A rise in the standard of living will mean the poor will want more "stuff" straining everything from our ocean bounty to a scarcity of rare earth elements. Battles both military and economic may ensue over them.

The pension time bomb has already gone off in Illinois and will be a huge problem for localities in the coming years. Your parents guaranteed payouts they never had to pay for. Unlike Social Security many pension funds are either bankrupt or will require a substantial input from localities resulting in a substantial loss of services.

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    Nov 11 2012: I also, as did Pat, believe that the fiscal cliff will be resolved but do not believe that it will stop a recession. Our position in the world is in serious trouble rampant spending, weakened economy, shift to socialism with deminishing funds avaliable to support the programs, some have expressed the national debit will rise to 20 trillion by next year, the White House continuing to bypass Congress, through the use of Executive Orders, with unfunded programs like the White House Rural Sustainability Act (basically UN article 21) which has committed 25 agencies to suppot this Act, etc ...

    Add to the mix that there is a whole sale change of Cabnet members, directors, and heads of agencies taking place. Even our staunchest allies are asking questions of the US. With our credit rating down to aa- the confidence of the capital investors is missing. The small businesses are in jeaporody. The taxing, health care requirements, and tons of policy changes will set all businesses back. The federal requirement to the states are causing serious concerns and 28 states have stated that they are at or near bankruptcy.

    The inability of the parties to work together is made worse by the Administration stating that he will not sign anything that does not include a extreme tax on the wealthy. At what point should the goal be to put people back to work. Berneke at the Fed has stated that he will not seek another term as the Chairman. However, as Japan learned the hard way once you enter into the QE world it is almost impossible to leave.

    I have not either seen or heard anything that inspires me to believe that the economy is being addressed, or that spending will cease, or increases in government size will slow down. If none of these are addressed what are the chances of recovery?

    Summary: in my opinion .. the fisical cliff is the least of our worries.
    • Nov 12 2012: "some have expressed the national debit will rise to 20 trillion by next year"

      You're saying the deficit would go from $1.1 trillion (the lowest amount in 4 years) to $4 trillion in one year even though revenue is projected to rise? What have you been smoking?
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        Nov 12 2012: First I want to express that your replies often put me off but I find it insulting that you insuate that I smoke anything. I will only once ask you that you reply civilly.

        There is some question if revenue will rise. Small businesses are closing rapidly and the advent of Obama care could cause the close or at least a reduction in force of many corporations. The implementation of Cap and Trade in the power industry could force the closing of many power plants around the US thus more unemployment with the effect of causing the rise in cost of power.

        There is a strong likelyhood that we will enter a depression by early January and at some point the actions of the fed will cause inflation. I am not an economist and just read opinions. I have not read any opinions of anyone who believes that the national debit will maintain at 16 trillion or deminish. Investment capital has all but vanished for lack of confidence.

        I have not heard of the expectation of the revenue being projected to rise.

        These are things I have read ... differing arguments are just as valid to the uninitiated such as me. So I am willing to listen to your argument of growth.
        • Nov 14 2012: Just do the math: a $4 trillion deficit would almost double federal expenditure in one year, it's a completely ridiculous notion. At the worst point of the recession the deficit was $1.5 trillion.

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