The fiscal cliff – why a deal will happen

The fiscal cliff deadline of January 1st 2013 is fast approaching.   It appears that no deal will be made, we will all go over the cliff, and the Mayan apocalypse will be proven correct a few days too late.   But a deal will be made, that is 100% assured, even if it is a few days late, and here is why.

The tax increases will take affect, and the public will be seriously displeased, but they will not protest in mass.    Polls have shown that while the public does not want tax increases, much of the public has come to understand that in order to solve the country’s budget deficit and national debit, tax increases combined with spending cuts must take place, even if they do not like it at all.

What will set the public into a far greater fit of anger and rage will be the automatic spending cuts.   When the sequester was put into place, it was done as a last ditch threat as part of the fiscal cliff talks of 2011.    During those talks, it was agreed that a bipartisan commission would be set up in 2012 to come up with a solution to the problem.   As an incentive to push both sides to come to an agreement, a sequester of large tax increases and spending cuts would take place.   This was only supposed to be a motivator.   It was never expected that the sequester would happen because every sensible person knew the the reality of the sequester is far worse than the items both sides objected to while trying to come to an agreement.

Once the spending cuts hit, they will be very large.   Many citizens receiving government checks will get a substantial reduction or delay, or both, in their checks.   Not much motivates people to take action as when they don’t receive money they feel they should receive.     Ultimately, the leaders of the political parties know this and will come to an agreement.