There's lots of consternation in Washington and among the chattering class over the "fiscal cliff" and while the hype will whipsaw markets and keep the politicians busy, it really is a drop in the bucket:
I see the future: The politicians will meet and fret and hold press conferences and predict disaster. Then they'll reach a deal.
It will just postpone the reckoning, but they'll congratulate themselves, and the media will move on.
America, however, continues to go broke.
"They're not going to admit that we're bankrupt, and they won't admit that we're on the verge of a major, major change in our society," says Rep. Ron Paul, R-Texas. "So they'll keep putting it aside, but then we'll eventually probably destroy the dollar."
The across-the-board cut, or "sequestration," was designed to be so distasteful that Congress would be moved to cut more deliberately. If it doesn't act, $110 billion in projected spending will be automatically cut -- half from domestic spending, half from the Pentagon.
"They assume that they made it so bad that they wouldn't accept it, but I don't think they did," said Paul. "They're not even ... talking about real cuts. They're talking about cuts in baseline budgeting."
Right, the old baseline budgeting trick.
"If they propose, let's say, a $10 billion increase for next year and cut it down to $9 billion, they say they're cutting 10 percent. But they're not cutting anything, they're only increasing it $9 billion instead of $10 billion. It's done on purpose so that people get confused."
Even better, the amounts under discussion are miniscule compared to the across-the-board cuts that are needed:
"When government spending is about $3.8 trillion, you're going to cut $100 billion? That's a deck chair on the Titanic," said Russ Roberts of the Hoover Institution.
And the US budget is looking more like the Titanic every day.
