Paul Krugman and I agree....the fiscal cliff is a complete and total myth, a creation of the conservative entertainment complex. The fiscal cliff myth was created by the Radical Republicans to use as a bargaining chip to keep the Bush tax cuts in place a bit longer.
The truth is really quite simple. The credit rating of the United States doesn't matter because there is no place else for the wealth of the world to go but into US dollars. The Chinese cannot pour their ill-gained profits into their own currency because that would create rampant inflation that would in turn drive their prices up on the world market. The US has the only economy large enough to absorb the world's excess capital and therefore US debt instruments are the only storage mechanism available for excess wealth. This being the case, credit ratings bestowed on US debt instruments by private, for-profit credit grading agencies are completely irrelevant to foreign investment in the US.
The second reasons that the fiscal cliff is a myth is that the world's economies are already so heavily invested in US debt instruments that their failure to continue buying them would result in a crash in the value of those instruments and hence in their investments in those instruments.
The fiscal cliff is a bargaining chip.....and the price of that chip is the privatization of Social Security.
The prospective intention of the Radical Republican movement is to defund the government of the United States, which has been using the Social Security Fund as a piggy bank since the Johnson administration. By "privatizing" social security, the Radical Republicans would advance their agenda of "starving the beast" by cutting off discretionary funds that the federal government has been using for things like disaster relief and other off-budget expenses. Privatization would take the annual collections for Social Security out of the federal revenue stream, and add those funds to "cash handle" that private investment firms collect their commissions on.
In 2011, according to the Heritage Foundation, Social Security and Medicare amounted to $818 billion, 35% of the revenue collected by the Federal government. Removing those funds from federal revenues would result in the immediate crash of the federal government, which would not have sufficient operating revenue to meet obligations.
Anyone who thinks that privatizing Social Security is about mean-spirited Republicans taking money away from senior citizens is missing the point. The privatization of Social Security is really about undermining the government of the United States financially for the express purpose of weakening the Union to the point where it would simply dissolve under weight of its unfunded obligations.
Why would such ardent patriots as the Radical Republicans claim to be want to destabilize the American government?
Choice A: They are really, really stupid and don't understand the consequences of their proposals
Choice B: They aren't really such ardent patriots at all and are, in fact, a subversive element that has been attempting to reverse the course of history since 1945 to the point where they could install a fascist dictatorship over the United States.
The choice appears self-evident. They aren't stupid so they cannot be unaware that their proposals will effectively destroy the central government of the United States, which has been their goal since 1865, when they lost their bid for secession, and their efforts to retain slavery as the law of the land.
It is one of the great ironies that the party that preserved the Union has become the party of those who wish to destroy it and the party that abolished slavery is now the party that wishes to restore it.
Left to their devices, the Republican oligarchy would force the American worker back into the abject poverty and wage-slavedom that characterized their lives from the 1860s to the 1930s, forcing people of all colors back into the same subservient relationship to their employers that Negro slaves suffered at the hands of their slave owners.
This is the future that these fools are trying to impose upon us.
Make no mistake about it. This isn't your grandfather's Republican party. This is an ugly beast in our midst that wishes to feed off our elders while they enslave our young.
Over my dead body....and I do mean that literally, because the Republican agenda, if enacted, will leave me starving to death in the street. I would rather go out standing on my feet and screaming than on my knees and moaning.