The reality cliff

Well apparently the US has avoided the much feared "Fiscal Cliff".

But I wonder if this isn't another example of he who defines and names an issue getting their way.

Instead of facing up to reality ( or perhaps facing up to its responsibility for past fiscal extravagance ) the US has gone down the rabbit hole again.

Democrats have got their pointless symbolic attack on the rich ( who can employ clever people to make sure this just doesn't happen anyway ), the Republicans have avoided the tax increases that worried them and the spending goes on.

The winner is fiscal incontinence.

The rest of the world breathes easier as we expect to make money on the US carrying on running up its debts, and the end of this won't be tomorrow.

You have to wonder if the right answer wasn't going over the cliff and facing reality.

When Mrs Thatcher won power in the UK she raised taxes and cuts spending. Famously 100 economists wrote to condemn her for going against received economic wisdom. The UK was saved and the experts proven to be impotent.

I know the arguments are complex - but I wonder if the right answer wasn't to face the music rather than kicking the can down the road.