I heard a story one time about an optimist that had fallen from the top of the Empire State Building. When he went by some screaming observers on the 43rd floor, he gave them the "thumbs-up" and said "So far, so good!". I guess that's what our representatives in Washington were thinking when they supposedly avoided the "fiscal cliff" by agreeing to raise both taxes and spending a couple of nights ago.
Figures and estimates are still being tossed about, but most seem to agree that the deal will add between $500 billion and $1 trillion a year to the federal debt for the next few years, give or take a few billion or so. Although I haven't seen it yet, I suspect there is something in the emergency bill that can be interpreted to allow the federal debt limit to be raised without congressional approval. Not that it really matters.
When I ran for congress last year one of my campaign points was that it didn't matter if we elected Democrats or Republicans, because whichever party won, by 2016 the federal debt would be around $20 trillion. That's one thing about running for office as a Libertarian. You seldom get satisfaction from winning, so you have to take satisfaction from being right.
Now, I don't know when the guy plummeting towards the ground decided his trip wasn't going to have a good ending, and I don't know when the Republicans and Democrats are going to decide that this much deficit spending isn't going to have a good ending. Maybe not until the end.
I decided last November that if a $16 trillion debt wasn't enough to make people vote for limited government, then a $20 trillion debt probably wasn't enough either. I'm pretty well convinced there just isn't much anybody can or will do to save the federal government as it now exists. The ultimate changes we will see in it will be the result of a financial reality, not as the result of the way we voted. It's a lot like when an addict reaches the point of no return. All we have to decide now is whether we want to allow them to ruin us all with them, or let them go and save the people that want to be saved.
For those that put any faith in the Constitution, states and individuals still have the 10th Amendment which allows us to opt out of most of Washington's programs and spending. Obviously, this will be difficult or seemingly impossible for people that have grown totally dependent on the federal government, and history has shown us that they will continue to try and take as much as they can from as many as they can.
But as you go about your business for the next few weeks, pay attention to how much of it doesn't involve the federal government, and how the things that currently involve the federal government could continue on without it. What if the money we spent to support roads actually went to roads instead of some federal bureaucracy? Consider that people would still interact to exchange goods and services. Farmers would still farm, carpenters would still carpenter, and manufacturers would still manufacture. Teachers will still teach, and doctors will still doctor.
No doubt there will be some adjustments to be made, and those that are prepared to survive without the federal government will probably fare better than those that aren't prepared to survive without the federal government.
I don't believe the federal government or it's support systems will collapse all at once. More likely, payments that come from it will start to be gradually reduced based on the recipients loyalty and needs, and the people who fund it will continue to seek and find ways to protect their assets from it. Debts, real and imagined, will be called in that simply cannot be paid.
We have a lot of transition to go through, and I don't believe anybody knows for sure when the final bubble will pop. Maybe in a year, or maybe in a decade. It's no longer a question of if, but when.
I'm guessing the best we can do is get on with our lives, and lessen our dependence on all things the federal government promises or threatens. Once we figure out we don't really need it on a daily basis, it won't seem like such a big deal when it isn't looking over our shoulder and bothering us every day.