It won't be the Grinch that steals Christmas, proclaims the White House Council on Economic Advisers. It will be the dreaded Invisible Fiscal Cliff Elf. According to the latest presidential propaganda, the ticking Austerity Bomb will blow up the consumer confidence of otherwise doting and indulgent parents. They might not be buying any toys for the tots unless he can cut a deal before Fiscageddon!
Sales figures for the holiday weekend were encouraging: total spending was $59.1bn, 12.8% higher than last year, according to a survey from the National Retail Federation. An estimated 139.4m adults visited US stores and websites from Thanksgiving through Sunday, up 6.4% from last year.
But Monday's report from the White House National Economic Council, entitled The Middle-Class Tax Cuts' Impact on Consumer Spending and Retailers, warned that consumer confidence, currently at a five-year high, was at risk. "The hard-earned rise in consumer confidence will be at risk if the middle-class tax cuts are not soon extended with a minimum of political drama," it said.So if you were making your list, the Paternalist-in-Chief wants you to check it twice before over-confidentally spending any more of your hard-earned cash. He wants to make sure you are very, very afraid. So afraid that you won't even notice that in order to protect your paychecks now, you will be retiring later with a smaller monthly Social Security check. So afraid, that you'll willingly wait a few years more for Medicare to kick in. So afraid, that a temporary tax hike for the rich will give you the illusion of everything being fair.
But here is what he isn't telling you: if no deal is reached, and all the Bush tax cuts expire as planned, the slight reduction in your paychecks will not be immediate. Moreover, Congress will have plenty of time and leverage to restore the middle class deductions retroactively, if need be. President Obama is not telling you this, because he desperately want to make this deal with the devil. He's wanted it since Day One.
While it is heartening to read that at least some Congressional Democrats are hitting back against President Scrooge, their posturing may be just more Kabuki Theater to make us believe there are still some good politicians left fighting for the little guy. Only time will tell. Meanwhile, a few lone voices in the wilderness, such as economists Paul Krugman and Dean Baker, continue speaking truth to the mendacious power of the Fix the Debt crowd and other phony deficit hawks. The best deal, they say, will be no deal at all.
So bah humbug to the Fiscal Cliff Elf in Chief. By the way, the toy factory he is visiting on Friday manufactures Angry Birds. If there really is a Santa Claus, they will go all Hitchcockian on him.