The Obama plan is now pretty clear. Do nothing at all about the deficit or the looming national debt disaster and raise tax rates. If you asked what is the worst possible outcome for the American economy, this is it. Meanwhile corporate leaders and even some Republicans are genuflecting over this solution as a great bargain.
If you think the fiscal cliff is a crisis, wait until social security and medicare run out of money which is about a decade away. At that point, the national debt will be 25 or 30 trillion dollars -- unpayable at any tax rates. The outcome? Check out Greece -- civil disorder and political chaos.
As for the economy, we are now in the new normal -- staggeringly high unemployment, virtually zero economic growth and little or no hope for the younger generation in jobs or in future income. Politically, you now face class warfare and you will soon face the war between the young and old over scarce resources.
What is happening at the federal level in the US is compounded by identical policies at the state and local level. Defined benefit pension funds are beginning to run aground with inadequate funding and no hope for ultimately paying beneficiaries. States are unable to fund their share of medicare and medicaid. As for education and infrastructure, there is simply no money left for such things and what little there is wasted by excessive union contracts and political waste. A stagnant, no-growth, economy only makes all of this that much worse.
This is the Obama legacy.