Now, Back to that "Fiscal Cliff"

Deal or no deal?  That is the question that still hasn't been answered.

But remember, no deal is better than a bad deal.   Obama is still holding firm thus far in the face of the Repugnicans who want to slash our social safety net to give millionaires and billionaires more undeserved and unnecessary tax breaks.  And Boehner seems to be sweating bullets.  If no deal is reached, it will not lead to financial Armageddon like the right-wing plutocrats claim.  The so-called "fiscal cliff" is really not a cliff at all--it's more like a staircase.  The full effect of the tax hikes (which occur on next year's income) and automatic spending cuts (which are phased in over a period of a few months) will not be felt right away, which clearly gives Obama the upper hand especially after January 1, 2013.   No wonder Boehner and his ilk are so nervous.

Even more importantly, the budget deficit is actually NOT the biggest economic problem our nation is facing.  The more pressing issue, of course, is the jobs deficit--the whopping 9 million Americans that are still out of work at the end of 2012, five years after the recession officially began (December 2007) and over three years after the recession officially ended (June 2009).  We are clearly stuck in a vicious cycle of persistently high unemployment and inadequate consumer and aggregate demand (remember that one person's spending is another person's income and vice-versa).  Remember that 70% of our entire GDP is consumer spending, and 20% is government spending.  And cutting the budget deficit too much too soon (at least by traditional means) would only make the jobs deficit worse, and the relative lack of revenue from the still-struggling economy is one of the biggest drivers of the budget deficit.   Basically, any significant tax hikes on the bottom 90% of Americans and/or any significant cuts in non-defense spending would only hurt our economy and make our future deficits (and national debt) that much worse in the long run.  If it turns out that these hikes and cuts must be done, and that is a very big "if", then they must be postponed until our economy is back to normal (i.e. two consecutive quarters of 3% GDP growth or higher and less than 6% unemployment).  Congress, you have been warned, so don't drink the Repugnican Austerity Kool-Aid.

Stoned in Seattle

Today is truly a historic occasion.  In Washington State, the initiative that legalized cannabis goes into effect, marking the first time any US state fully legalized the herb since it was federally banned in 1937.  In Seattle, there was plenty of celebration of this occasion, with hundreds of people toking up under the Space Needle.  Colorado also legalized it as well, and that goes into effect on January 5, 2013  December 10, 2012 (see update below).  In both states, the first legal retail outlets for weed are scheduled to be set up in early 2014 as the new laws are phased in.  Looks like Cypress Hill finally got his wish in two states, even if California was not one of them.

Of course, cannabis is still illegal under federal law, and it is still not clear exactly what the Feds will do.  While they say they will still enforce the current law, the situation is very similar to how NY ended alcohol Prohibition in 1923, ten years before national Prohibition was repealed.   Basically, the only ones enforcing it there were the feds, and they did not have nearly enough manpower or resources to do it alone (and they still don't).  That spelled the beginning of the end for Prohibition, and we hope that is true this time around for cannabis as well.  We will be closely watching this story as the next few months progress.

For the record, the TSAP supports full legalization of cannabis in all 50 states as well as federally.  By that we mean it should be taxed and regulated in a manner similar to alcohol and tobacco, with an age limit of 18, and no one should be arrested or jailed for simple possession of small amounts.  Growing one's own weed (within reason) should be treated like growing one's own tobacco or brewing one's own beer, and passing around a joint should be treated like passing around a tobacco cigarette or a bottle of beer.  Driving under the influence of cannabis should be treated the same as driving under the influence of alcohol, though the penalties should reflect the fact that the latter is far more dangerous than the former.  And we hope this will all become reality sooner rather than later.

UPDATE:  On December 10, Colorado Governor John Hinckenlooper signed an executive order that made the initiative currently official.  Thus, cannabis possession is now legal in both states for all people over the age of 21, while sale remains at least technically illegal for now pending the creation of a regulatory framework for such sales.