"US annual GDP is just over $15 trillion. So the sum of the cuts ($1.2 trillion) over ten years is just over seven percent of one year's GDP. If this amount were to be cut in one year, it would indeed cause a Depression-level contraction. It would be a monumentally bad idea, right up there with Hoover's 1932 tax hikes. But the actual cut for 2013 is a tenth of that figure, less than one percent of GDP, each year, over ten years, which is far less dramatic.....

So the real effect of the fiscal cliff, on the cuts' side at least, is less than one percent of GDP a year (assuming strong negative fiscal multipliers), half of which is in a defense budget that is bigger now than it was at the height of the Cold War and desperately needs downsizing. Indeed, after the cuts the real rate of growth in both defense and discretionary programs will still be around 1.5 percent a year. Jumping over the cliff does not even produce an absolute decline in spending.

But of course, the cuts are only half the story — the other portion of the cliff comes in the form of tax hikes. Payroll taxes will go back up to their 2009 level, while income tax rates will rise across the board — to where they were in the 1990s. Americans will pay, by one estimate, up to $400 more a year in taxes for the bottom 20 percent of earners, up to $14,000 a year more for the top 20 percent of earners, and up to $120,000 a year more for the top one percent.Yet even then, at the end of this ten-year phase-in of higher taxes and lower spending, Americans will still pay less in tax than practically all other taxpayers in rich countries.....

Since the Bush tax cuts of the early 2000s, the US federal government has taken in about 18 percent of GDP in revenues while spending 25 percent. That's where the US budget deficit comes from. Multiply that over time, and you get a large proportion of the "out of control debt" that Congress has been banging on about since 2008. But if Congress really cares about the level of debt, then raising taxes and cutting spending are precisely what's needed."

http://blogs.hbr.org/cs/2012/12/the_fiscal_cliff_is_just_a_lon.html

The Deal for All resolution, H.Res 733, which additional Members will cosponsor through the end of the year, advocates four key policies that have built the middle class, expanded the nation’s economy and must play a significant role in any future budget negotiation:

(1) No cuts to Medicare, Medicaid, or Social Security benefits;

(2) Must contain serious revenue increases, including closing corporate tax loopholes and increasing individual income tax rates for the highest earners;

(3) Significantly reduce defense spending to focus the United States Armed Forces on combating 21st century risks; and

(4) Promote economic growth and expand economic opportunity by including strong levels of job-creating Federal investments in areas such as infrastructure and education, and by promoting private investment."

"t's no secret that the CIA and FBI can read your emails for any old reason they choose without having to clear it with anyone first (because you're a terrorist). That was on track to change with an amendment attached to an upcoming bill... before said amendment was quietly dropped from said bill.

The bill in question is the smoothy titled Video Privacy Protection Act Amendments Act of 2012, which requires video service providers like Netflix to allow you to opt out of having your information posted on places like your Facebook page. According to AllGov, an amendment that was attached to the bill that would've required the federal government to obtain a warrant before snooping around your inbox disappeared as the bill was passed.

The Senate was set to approve the video privacy bill along with the email amendment, which would have applied to a different law, the 1986 Electronic Communications Privacy Act. But then senators decided for reasons unknown to drop the amendment.

As it stands now, any email or other data stored on a third-party server (i.e. not your own computer) can be accessed by the feds as long as it's at least 180 days old. That's a rule that will become even more problematic and dangerous as companies continue to push customers to store data on cloud services.

Of course, the feds' ability to read your emails is probably not going to change anytime soon, either. This story isn't splashed across the front of any newspapers or leading any news broadcasts, and it's not winning or losing anyone any elections. On we go." http://gawker.com/5971164/merry-christmas-from-the-feds-who-can-still-read-your-emails-without-a-warrant

"YVES SMITH: I'm not sure that compromise is worthwhile. If we go over the fiscal cliff or into the fiscal slope, we're going to have the tax increases kick in. If Obama were interested in negotiating for a better deal for the ordinary person, he should actually go into January. But the whole fact that he wants a deal now says that, says that he is as conservative as Bruce says he is.

BILL MOYERS: You mean we should go over?

YVES SMITH: We should go over.

BILL MOYERS: And see what happens?

YVES SMITH: We should go over just because then we've already had tax increases put in. Republicans don't have the leverage of doing a deal without the tax increases already having taken place. You're in a very different negotiating position. Going past January 1 would actually be a very good outcome for ordinary Americans.

BRUCE BARTLETT: I'd say let the fiscal cliff take effect permanently. Now everybody's afraid to do that. They think the economy's too fragile. But if you look at what the Congressional Budget Office has estimated. They say, "Yes, we'd lose some growth for about half a year. But the medium and long term growth would actually be higher, because it would actually do exactly what everybody says they want to do, which is cut a lot out of the long-term deficits. And it would do so fairly by raising revenues a lot and cutting spending." What, how else are we going to cut the defense budget if we don't allow the sequester to take effect? Both parties are pretty much into that. So I say let's just let the whole thing happen. If I was a member of the Senate, I'd filibuster anything to get rid of it." http://billmoyers.com/episode/full-show-fiscal-cliffs-and-fiscal-realities/