Tax mad French aim for 300 percent tax hike for... chocolate spread

It's a nutty world of tax and spend in France. But this takes the biscuit

by Robin Shepherd

According to OECD figures, French government spending as a percentage of GDP is a whopping 56 percent. Just quote that figure to anyone who tells you we live in a neo-liberal, free-market capitalist world (the average in OECD countries is 46 percent, by the way).

Well, if you're going to bomb and strafe your people out of their hard earned money, it has to come from somewhere. So why not hit the poor beleaguered French family where it really hurts them, right there in the famous French kitchen.

According to France 24, the latest piece of dirigisme comes in the form of an attempt to hike taxes by 300 percent (!) on a key ingredient in the all too delicious Nutella hazlenut chocolate spread (no, they haven't paid us to say that, but donations would be very welcome).  

France 24 reports that:

"The bill, which was adopted by a Senate commission and heads to the National Assembly this week for review, has been dubbed by French media as the “Nutella tax”. Upon careful inspection of the spread’s ingredients, it turns out that roughly 20 percent of the product is made of palm oil, which is known to be high in saturated fats and can potentially cause heart disease.

"The widespread use of palm oil has also been criticised for leading to deforestation in countries like Indonesia and Malaysia."

BRUSSELS SPROUTS: Kafka's EU fruit and veg fiasco

Franz Kafka could not have thought up this latest EU bureaucratic nightmare, but Britain isn't innocent either

By Alexandra Swann

Enter stage left, Franz Kafka.

As is well known, the European Institutions have an entrenched aversion towards transparency. For this reason, if one speaks fluent Eurocrat the most interesting, and often the more appalling revelations and grievous, costly errors can be found by trawling the seemingly dull acres of studies, policies and consultations found within the Institution's websites.

I do it, so you don't have to.

This week, I stumbled across a small gem hidden in a study into agricultural subsidies, marked as health policy. When you read between the lines, the study has inadvertently revealed tensions at the very heart of Whitehall.

As a bit of background, in 2009 the Commission set up the EU School Fruit Scheme, an EU-wide scheme to provide fruit and vegetables to school children, with an annual budget of 90 million euros. Given that the UK contributes roughly 14 percent to the EU budget, we are covering around 12.6 million euros towards this budget.

French State's War on French Economy

State meddling at its worst

By Fabio Rafael Fiallo

In 2000, France's Prime Minister Lionel Jospin, leader of the Socialist Party and a Trotskyite in his youth, caused public outrage by acknowledging that, in the economic realm, "the state cannot do everything." Everywhere else under the sun, such an assertion would have been accepted as a mere statement of fact. Not in France, however, where the population has been educated to believe that the state can do more and better than the market.

That belief has been at work for quite some time. It is worth recalling the case of the Franco-British supersonic jet Concorde, sponsored and vaunted by General de Gaulle in the 1960s as a flagship of French "grandeur." The Concorde project took the form of an agreement, not between profit-seeking, autonomous firms, but between the French and British governments. The plane took off in 1969, but it was never bought by airlines other than those of the two countries concerned. It was a commercial fiasco.

In France, state-piloted economic crashes are anything but negligible. In the 1980s, French authorities decided to disburse taxpayers' money as way to help the launching of Minitel, a supposed competitor to the U.S.-created Internet, as well as the purchase of the domestically-produced computer TO7. Their fate? Well, Minitel has become a museum piece, while TO7 lived only 2 years (1982-1984) before ending up in garbage dumps.

Cue the state involvement in the rescue of the ailing Credit Lyonnais in the 1990s. That maneuver was worse than a fiasco, it was a scandal. High-risk loans and criminal embezzlements, as well as compensation payments aimed at avoiding legal suits, brought about losses that reached the equivalent of 20 billion euros.

The Hard Fiscal Facts

Individual tax payments are up 26% in the last two years

By Ron Newall

While the rest of America was holding an election last week, the gnomes at the Congressional Budget Office released the final budget totals for fiscal 2012. They're worth reporting because they illuminate the real fiscal choices that confront the country, as opposed to the posturing you'll be hearing over the next few weeks.

The nearby table lays out the ugly details. The feds rolled up another $1.1 trillion deficit for the year that ended September 30, which was the biggest deficit since World War II, except for each of the previous three years. President Obama can now proudly claim the four largest deficits in modern history. As a share of GDP, the deficit fell to 7% last year, which was still above any single year of the Reagan Presidency, or any other year since Truman worked in the Oval Office.

Tax revenue kept climbing, up 6.4% for the year overall, and at $2.45 trillion it is now close to the historic high it reached in fiscal 2007 before the recession hit. Mr. Obama won't want you to know this, but this revenue increase is occurring under the Bush tax rates that he so desperately wants to raise in the name of getting what he says is merely "a little more in taxes." Individual income tax payments are now up $233 billion over the last two years, or 26%.

This healthy revenue increase comes despite measly economic growth of between 1% and 2%. Imagine the gusher of revenue the feds could get if government got out of the way and let the economy grow faster.

It's the Welfare State, Stupid

Who deserves support? How much? How long?

By Robert Samuelson 

If you doubt there's an American welfare state, you should read the new study by demographer Nicholas Eberstadt, whose blizzard of numbers demonstrates otherwise. A welfare state transfers income from some people to other people to improve the recipients' well-being. In 1935, these transfers were less than 3 percent of the economy; now they're almost 20 percent. That's $7,200 a year for every American, calculates Eberstadt. He says that nearly 40 percent of these transfers aim to relieve poverty (through Medicaid, food stamps, unemployment insurance and the like), while most of the rest goes to the elderly (mainly through Social Security and Medicare).

By all means, let's avoid the "fiscal cliff": the $500 billion in tax increases and federal spending cuts scheduled for early 2013 that, if they occurred, might trigger a recession. But let's recognize that we still need to bring the budget into long-term balance. This can't be done only by higher taxes on the rich, which seem inevitable. Nor can it be done by deep cuts in defense and domestic "discretionary" programs (from highways to schools), which are already happening. It requires controlling the welfare state. In 2011, "payments for individuals," including health care, constituted 65 percent of federal spending, up from 21 percent in 1955. That's the welfare state.

Yet, the subject is virtually taboo. Because Americans disapprove of government handouts, we don't even call the welfare state by its proper name, preferring the blander term "entitlements" (the label used by Eberstadt). Mitt Romney's careless comment about "the 47 percent" receiving government benefits -- implying they're all deadbeats -- squelched any serious discussion in the campaign. Interestingly, his figure is probably low: More than 50 percent of Americans may already receive benefits. Obamacare will raise this, because families with incomes up to four times the federal poverty line ($91,000 in 2011 for a family of four) qualify for insurance subsidies.

Baptists and bootleggers on the retreat

US Gone to Pot, but Not Completely

by Mark Thornton

The only good thing about the 2012 campaign — other than its being over — is that much progress was made on marijuana policy. Marijuana was legalized in two states, Colorado and Washington. Medical-marijuana legislation passed in Massachusetts. Marijuana was decriminalized is several major cities in Michigan and Burlington, Vermont, passed a resolution that marijuana should be legalized. The only defeats were that legalization failed to pass in Oregon and medical marijuana was defeated in Arkansas.

This is a stunning turnaround from the 2010 campaign when Prop 19 in California failed to pass despite high expectations. I explained in detail why Prop 19 failed here. It was an unfortunately common story of Baptists, i.e., people who oppose it, and bootleggers, i.e., people who profit from black-market sales, who stopped the legalization effort.

With regards to the legalization victories in Colorado and Washington, Tom Angell, Director of LEAP (Law Enforcement Against Prohibition) called the election a "historic night for drug-law reformers." Paul Armentano, the deputy director of NORML (National Organization for the Reform of Marijuana Laws), called the Colorado and Washington victories "game changers," noting that "both measures provide adult cannabis consumers with unprecedented legal protections." He noted that "until now, no state in modern history has classified cannabis itself as a legal product that may be lawfully possessed and consumed by adults." Writing for the Marijuana Policy Project, Robert Capecchi called Colorado and Washington "historic victories," saying that they "represent the first bricks to be knocked out of the marijuana prohibition wall."

Laws should be made by The People, not judges

Antonin Scalia is unpopular with liberals, but he has a point about democracy

by Luke Gittos 

As much as one can be a fan of judges, I have long been a fan of justice to the US Supreme Court, Antonin Scalia.

This is despite, not because of, the fact that he is a social conservative and an outspoken critic of many of the Supreme Court’s most liberal decisions. He is one of the most controversial figures in American public life. He is routinely described as ‘evil’ and ‘prehistoric’ for his opinions on cases involving, for example, laws banning homosexual sex and the use of torture. Following his outspoken defence of the Supreme Court’s decision in Bush v Gore, the case which is commonly thought to have ‘decided’ the 2000 US presidential election, many think of him as a right-wing ‘counterrevolutionary’, whose goal is to force a radically conservative agenda through his unflinching endorsement of conservative laws.

The striking thing about the opprobrium that Scalia receives is that he often arrives at his conclusions because of his devout commitment to the separation of powers and limiting the power of the federal courts to interfere in the democratic lawmaking process. Last week, he was in the news for saying that draconian amendments to the Foreign Intelligence and Surveillance Act, which were passed in 2008, could not be challenged in the federal courts, saying that the fact that challenge lay outside the court’s jurisdiction meant it was ‘none of our business’.

In the process of arguing for limitations to the federal courts’ power to bestow rights, Scalia has certainly defended the rights of states to hold and enforce some pretty awful laws. In the landmark 2003 case Lawrence v Texas, Lawrence and his partner had been arrested in their homes for having homosexual sex, which has been outlawed under Texan criminal law since 1974. Lawrence took the case to the Supreme Court to argue that the federal constitution protected the right for homosexuals to have sex, under the Fourteenth Amendment, which is known as the ‘due-process clause’. The amendment prohibits any state body from depriving a citizen of life, liberty or property without proper due process. The argument for Lawrence was that in being denied the right to have sex in his own home, he had been arbitrarily denied a significant aspect of his liberty.

A Return to Judicial Activism

What Obama’s second term means for the courts

BY ADAM FREEDMAN

Tuesday’s election victory means that President Obama will have four more years to reshape the federal judiciary. While it remains to be seen whether he can achieve any legislative victories in the face of Republican opposition, there is little doubt that he will, for the most part, get to appoint the judges of his choice.

Four justices on the Supreme Court are in their mid- to late seventies now: Ruth Bader Ginsburg, Antonin Scalia, Anthony Kennedy, and Stephen Breyer. With past as prelude, we can expect any Obama nominees to be reliably liberal in the mold of his two appointments from the first term, Justices Elena Kagan and Sonia Sotomayor. At a minimum, the president will likely replace the aging liberals Ginsburg and Breyer with younger models. But it’s also possible that Kennedy or Scalia, or both, could leave the bench during the next four years, presenting Obama with an opportunity to forge a liberal majority on the Court.

An invigorated and expanded liberal bloc on the Court could undo many important precedents. The Court’s decisions, for example, protecting speech rights of corporations (Citizens United v. FEC), school choice (Zelman v. Simmons-Harris), and the right to bear arms (District of Columbia v. Heller and McDonald v. Chicago) were all decided on 5–4 votes. Challenges to Obamacare and other recent regulations are likely to present the Court with major decisions on religious liberty and federalism over the next few years.

Is Democracy Sustainable?

Democracy is for PR only in corrupt neofeudal nations

by Charles Hugh-Smith

Correspondent Chris rightly critiqued me for not mentioning democracy (or the lack thereof) in my recent entry on China: Do We Have What It Takes To Get From Here To There? Part 2: China. It is indeed vital to include democracy in any discussion of corruption, for it raises this question: is democracy possible in a corrupt society?

We can phrase the question as a corollary: in honor of my new book Why Things Are Falling Apart and What We Can Do About It , let's call it WTAFA Corollary #1:

If the citizenry cannot replace a dysfunctional government and/or limit the power of the financial Aristocracy at the ballot box, the nation is a democracy in name only.

In other words, if the citizenry cannot dislodge a parasitic, predatory financial Aristocracy via elections, then "democracy" is merely a public-relations facade, a simulacra designed to create the illusion that the citizenry "have a voice" when in fact they are debt-serfs in a neofeudal State.

When the Status Quo remains the same no matter who gets elected, democracy is a sham. We might profitably look to Japan as an example of a nation which replaced its dysfunctional dominant party via elections to little effect (Do We Have What It Takes To Get From Here To There? Part 1: Japan).

We can ask this question of Greece: in a pervasively corrupt neofeudal society, is democracy even possible?

Neofeudalism is characterized by a carefully nurtured facade of social mobility and democracy while the actual machinery of governance is corrupted at every level.

This corruption may manifest as first-order daily-life corruption such as buying entry to college, bribing officials for licenses, and so on, but the truly serious corruption is the second-order variety that functions behind the closed doors of central banks and financial/political Elites.

Here in the U.S., the people elected Barack Obama in 2008 on the implicit promise that the politically dominant financial sector would be limited in some meaningful fashion. Instead, President Obama immediately nixed any meaningful reform.

Japan nears fifth recession in 15 years

Harakiri in slow motion

By Ben McLannahan in Tokyo

The Japanese economy has shrunk at its fastest pace since the earthquake-hit first quarter of 2011, piling pressure on the government to try to avert recession.

Yoshihiko Noda, prime minister, described the 3.5 per cent annualised decline in the July-September period as “severe”. Seiji Maehara, economy minister, said Japan had possibly entered a “recessionary phase”.

Many of Japan’s economic indicators have deteriorated since September, leading economists to predict that the nation has entered its fifth technical recession – two consecutive quarters of contraction – of the past 15 years.

“The question is how long and deep this downturn will be and how policy makers will react,” said Masamichi Adachi, an economist at JPMorgan.

The economy posted relatively strong growth in the first half of the year, as output was boosted by reconstruction in areas of northeastern Japan devastated by the March 2011 earthquake and tsunami. But it took a turn for the worse in the third quarter, as demand ebbed in China while Europe remained sluggish.

In July-September, Japanese exports fell 5 per cent, while household consumption and business investment also slipped. Excluding early 2011, the data released on Monday marked Japan’s biggest quarterly contraction since the fourth quarter of 2008 during the Lehman crisis.

The people have spoken

Why President Obama Was Reelected

By James E. Miller

It’s a safe assumption to make that the reelection of Barack Hussein Obama to the office of the United States Presidency will be talked about for decades to come. In history textbooks, 2012 will be referred as a momentous election year when the nation came together and collectively decided to stick with a president through the thick. Like Franklin Roosevelt, Abraham Lincoln, and other “transformative” presidents before him, Obama will be praised for keeping the country together in the midst of economic difficulty. In sum, he will be called a popular figure who triumphed over America’s old guard and lead the nation into a new era of solidarity and renewed social tolerance.

The lavishing has already begun with prominent voices on the left like Paul Krugman declaring the “new America” has made Obama their champion. It’s being said in major newspapers across the world that this new incarnation of the American experiment is much more attuned to the struggle of minorities and the downtrodden. They went with a President who will use the divine power of the federal government to lift the disenfranchised onto the platform of dignified living.

Like most of what passes for accepted history, this is downright propaganda. The country as a whole wasn’t frightened over sudden change by throwing out the incumbent. It wasn’t a declaration of a new, more diverse America. Shaping a new destiny wasn’t on the casual voter’s mind on November 6^th.

There is a rational explanation for the President’s reelection which doesn’t invoke a deep or complex meaning. The only way to explain the outcome is in the simplest and direct prose: the moochers prevailed.

The UK's Most Disturbing Number

Total Unfunded Pension Obligations = 321% Of GDP

by Tyler Durden

For all our UK readers, who hope some day to collect pension benefits, we have two messages: i) our condolences, and ii) you won't.   Why? The answer comes straight from the ONS:

The new supplementary table published by ONS in Levy (2012)10 includes the following headline figures for Government pension obligations as at end December 2010:

• Social security pension schemes (i.e. unfunded state pension scheme obligations): £3.843 trillion, being 263 per cent of gross domestic product (GDP) (£3.497 trillion at end of December 2009)
• Centrally – administered unfunded pension schemes for public sector employees (i.e. unfunded public service pension scheme obligations): £852 billion, being 58 per cent of GDP (£915 billion at end of December 2009)
• Funded DB pension schemes for which government is responsible: £313 billion, being 21 per cent of GDP (£332 billion at end of December 2009).

In summary, the estimates in the new supplementary table indicate a total Government pension obligation, at the end of December 2010, of £5.01 trillion, or 342 per cent of GDP, of which around £4.7 trillion relates to unfunded obligations.

The Sun Sets on American Empire

The Short American Century: A Post-Mortem

By DANIEL LARISON

Throughout the campaign season, Mitt Romney and Barack Obama alike insisted that the 21st century must be another American century—that the U.S. should continue to be the world’s predominant military, economic, and political power for generations to come. After ten years of shattered hegemonic dreams, leaders of both parties still feel compelled to declare their loyalty to the vision that inspired the follies of the Bush era. Foreign-policy debate continues to turn on the question of how to preserve American hegemony, rather than how to secure U.S. interests once America is no longer so dominant. What nobody in Washington can acknowledge is the subject that this book addresses: the American Century, to the extent that it ever was real, is now definitely at an end.

Henry Luce famously coined the phrase in a 1941 issue of Life. He declared that America’s role was to “exert upon the world the full impact of our influence for such purposes as we see fit by such means as we see fit.” As Luce imagined it, that influence would extend to economic and cultural dominance as well as political. His missionary vision took for granted that America had not only the right but the obligation to propagate its values and exercise leadership throughout the world. Seventy years later, Luce’s idea is still part of Washington’s bipartisan consensus, but in recent years it has collided with the practical limits of American power.

The Fiscal Cliff and America's Coming Recession

Obama and the Crash of 2013

By Peter Ferrara

Since the end of World War II two thirds of a century ago, federal spending has been stable at around 20% of GDP. America prospered to become the mightiest economic power in the history of the world with the federal government limited to that level of spending.

But President Obama is certain he has a better idea. He wants higher taxes and higher federal spending. Only with that can he “spread the wealth around.” He believes that would make the economy grow faster “from the middle class out,” as the middle class and the poor spend the money “the rich” were wasting in savings and investment.

That is fallacious economics, based on the idea that we can spend ourselves rich. Economic growth and prosperity for working people and the middle class does not stem from increased spending and consumption. It stems from increased production and productivity. And that stems precisely from savings and investment.

You can’t consume what you don’t produce. Increased savings means increased investment, which is what creates new jobs and provides workers with the tools to be more productive. That increased productivity enables workers to earn higher wages, as wages in a competitive market equal the marginal productivity of labor (what the worker adds to production). The increased demand for labor created by the investment drives wages up to this level of productivity.

Spare me the miseducated thinking about the essential role of consumer demand to drive economic growth and prosperity. In a market economy, consumer demand can never be inadequate for the economy to grow and prosper. If demand is insufficient to clear the market for any good or service, then the price of the good or service will fall until demand equals supply.

Explaining Germany's Infantile Crush on Obama

Unrequited Love

by Jan Fleischhauer

It's too bad that Mitt Romney didn't win. If the Republicans had won, we could finally have known for sure that our suspicion of America's imminent demise is correct. "Four more years," translated into the German viewpoint means little more than a "four-year reprieve."

For the über-watchful among us, the signs of the downfall are obvious. One must only take a look at the condition of the streets (every fourth bridge is crumbling!), or the entirely outdated power grid, to come to the conclusion that this country has its future behind it. A nation that has its utility lines hanging from poles in the street, instead of burying them in an orderly fashion underground, cannot really be taken seriously.

With a bit of luck, the specter across the Atlantic might even take care of itself. It can't be ruled out. When they are not shooting each other or being fried by dangling power lines then the Americans might simply pop. Two out of every three US citizens are overweight, or even obese! Every child in Germany knows the numbers.

There is hardly an issue about which Germans as so united as they are by their desire to see America on its knees. It unites both the left and the right. Wherever they look, they see decay, a lack of culture and ignorance. "A perverse mixture of irresponsibility, greed, and religious zealotry," as my adversary, columnist Jacob Augstein, furiously argued on Monday.

A Blessing to Live in Germany

What a blessing it is, one must conclude, to live in Germany, a country where the highways are regularly repaired and the washing machines use so little water that one could water the entire Sahara with what is left over. In which citizens' initiatives are formed against McDonald's, and two-bit crime dramas are considered the pinnacle of TV entertainment. If the utility poles here were to snap like toothpicks, then it would be the fault of some natural catastrophe, the likes of which would make a hurricane seem like a gentle breeze.

Reading Between The Lines

Blame it on the Greeks

By Mark J. Grant

Tomorrow the Wizard turns 620. I was out with him last night in a little pre-birthday celebration and I asked him how it felt to have that many years under his belt. He laughed and replied that being a Wizard had it occurred to me that he might not have started at one? No, I admit, I had not thought of that, which opened up a realm of possibilities that the old codger could actually be far older or far younger than was generally presumed. I then asked him if he planned to be around for his 630th birthday day and he replied that the odds were good. He said he had done a whole statistical model and that very few people died between 620 and 630 and so he was likely to make it to the next milestone. At the end of the evening, with a twinkle in his eye, he informed me that he would not be here on Saturday in any event. He said that he had learned something from the Europeans and that he was going to follow their lead. He informed me that he was going to get on his broomstick, fly across the international dateline and so never have an actual birthday. Then he will return to America and claim that the damn thing never happened. I guess he is still learning a thing or two!

Reading Between the Lines

One of the great faults with paying attention to Europe is to take what they tell you as factual. The media trumpets what they are given by the various sources of information in Europe but a quite skeptical eye is what is needed. They claim that they do not have the “Final Troika Report” on Greece because they have not stamped it “Final” yet and so they blame their indecision on the magic trick that they are performing. Everyone on the Continent has the report but since they can agree on almost nothing they have blamed the lack of the rubber stamp as the culprit. They should just come out and say that,“It is the rubber stamp’s fault” and be done with it.

The poverty of environmentalism

Mark Boyle argues that we should all live without money to help save the planet. No thanks.

by Rob Lyons 

In one of the many eminently quotable scenes from Quentin Tarantino’s Pulp Fiction, two gangsters – Jules and Vincent – are sat in a diner discussing what Jules will do now that he has been the beneficiary of a ‘miracle’: someone shooting at him at point-blank range has managed to miss him completely. Jules decides that this ‘act of God’ is a sign that he should give up being a gangster and ‘walk the earth, like Cain in Kung Fu’ until he gets another sign from God.

Vincent is unimpressed. ‘No Jules, you’re gonna be like those pieces of shit out there who beg for change. They walk around like a bunch of fuckin’ zombies, they sleep in garbage bins, they eat what I throw away, and dogs piss on ‘em. They got a word for ‘em, they’re called bums. And without a job, residence, or legal tender, that’s what you’re gonna be: a fuckin’ bum!’

Mark Boyle would beg to differ on this assessment of a life without money. Born in Donegal in north-west Ireland, Boyle took a business degree but, having discovered the ideas of Mahatma Gandhi, decided that business in its mainstream form was not for him. He then lived in Bristol in England for a few years, running organic food businesses until a conversation with a friend suggested to him that money itself was the barrier to relationships between people and communities. So, he decided to see if it was possible to live without money.

The GOP’s Asian-American Fiasco

How Republicans alienated a once-allied bloc of voters

By LEON HADAR

If you are trying to figure out why the Republicans lost this presidential election and why they will probably continue to lose more in the future, forget for a second Latino voters (well, only for a second) and think for a few minutes about Asian-American voters.

In fact, let’s think about them strategically. Say you are a Republican politico who is analyzing the economic status, social mobility, and cultural disposition of various demographic groups and the voting behavior of their members.

And here is this bloc of voters who, let’s see, tend to gravitate to the private sector with many of them creating and managing small businesses. Actually, some of them belong to the wealthiest 1 percent of Americans, and most are doing quite well in terms of income and job security. They also are very family-oriented and subscribe to more traditional values.

Based on these and other social and economic indications, Asian-Americans as an electoral bloc should be natural political ally of a Republican Party that is, after all, committed to the principles of the free market, supports the interests of small businesses, and celebrates hard work and family values, which is probably the way to describe what Asian-Americans are all about.

Reality doesn't need to win Electoral College

American electorate opts to defer course correction for another four years – if they get that long

By MARK STEYN

Amid the ruin and rubble of the grey morning after, it may seem in poor taste to do anything so vulgar as plug the new and stunningly topical paperback edition of my book, "After America" – or, as Dennis Miller re-titled it on the radio the other day, "Wednesday." But the business of America is business, as Calvin Coolidge said long ago in an alternative universe, and I certainly could use a little. So I'm going to be vulgar and plug away. The central question of "Wednesday" – I mean, "After America" – is whether the Brokest Nation In History is capable of meaningful course correction. On Tuesday, the American people answered that question. The rest of the world will make its dispositions accordingly.

In the weeks ahead, Democrats and Republicans will reach a triumphant "bipartisan" deal to avert the "fiscal cliff" through some artful bookkeeping mechanism that postpones Taxmageddon for another year, or six months, or three, when they can reach yet another triumphant deal to postpone it yet again. Harry Reid has already announced that he wants to raise the debt ceiling – or, more accurately, lower the debt abyss – by $2.4 trillion before the end of the year, and no doubt we can look forward to a spectacular "bipartisan" agreement on that, too. It took the government of the United States two centuries to rack up its first trillion dollars in debt. Now Washington piles on another trillion every nine months. Forward!

US Set to Re-stage Greek Tragedy

Germany, Europe and the world are hoping that the same fate is not in store for the US

By David Böcking

The US has more in common with heavily indebted southern European countries than it might like to admit. And if the country doesn't reach agreement on deficit reduction measures soon, the similarities could become impossible to ignore. The fiscal cliff looms in the near future, and it’s not just the US that is under threat.

The US has finally voted and the dark visions of America's future broadcast on television screens across the country -- and most intensively in battleground states -- have come to an end. Supporters of both Barack Obama and Mitt Romney had developed doomsday scenarios for what would happen if their candidate's opponent were to win. Four more years of Obama, the ads warned, would result in pure socialism. A Romney presidency would see the middle and lower classes brutally exploited.

But following Obama's re-election, Americans are now facing a different, much more real horror scenario: In just a few weeks time, thousands of children could be denied vaccinations, federally funded school programs could screech to a halt, adults may be forced to forego HIV tests and subsidized housing vouchers would dry up. Even the work of air-traffic controllers, the FBI, border officials and the military could be drastically curtailed.

That and more is looming just over the horizon according to the White House if the country is allowed to plunge off the "fiscal cliff" at the beginning of next year. Coined by Federal Reserve head Ben Bernanke, it refers to the vast array of cuts and tax increases which will automatically go into effect if Republicans and Democrats can't agree on measures to slash the US budget deficit.