It was important for a while. Now it's starting to get ridiculous.
The "fiscal cliff" could make or break the economy in 2013, since it entails a punishing set of tax hikes and government spending cuts that will either cause a recession, if they go into effect all at once at the start of the year as scheduled, or generate a national sigh of relief if Washington figures out a better way to address out-of-control deficit spending.
But for now, the cliff negotiations have degenerated into a predictable, gaseous farce starring politicians who relish nothing more than hearing themselves talk.
This would be mildly amusing if little were at stake. But the stock market is rising and falling based on the pronouncements about cliff negotiations by President Barack Obama, House Speaker John Boehner, and their various surrogates. Businesses are speeding up dividend payments and putting off hiring and spending decisions, in case Congress blows it and tanks the economy. For a while, ordinary Americans even paid more attention to the fiscal-cliff drama than to the weird cheating scandal that sank CIA Director David Petraeus.
Maybe we've all paid enough attention to the fiscal cliff for now. Here are three reasons it might be a good time to start tuning it out:
Politicians thrive on attention. When your child acts out, what's a more effective way to deal with it: Indulge their tantrums, or ignore them? Right. Same with politicians. If the media keeps drooling over every fiscal-cliff utterance, and citizens keep paying rapt attention, politicians will simply perpetuate the war of words.
What Obama, Boehner, et al really need to do is stop holding press conferences and cloister themselves in a windowless room with a pile of aging Domino's pizzas, emerging only when they can tell Americans they have a deal and we can all get on with our lives.
Nothing will happen until just before the deadline .... Anybody who's hopeful that an era of good feelings will sweep over Washington, leading to a dreamy bipartisan deal, needs to stop watching Frank Capra movies. Nothing of the sort is going to happen, because the political stakes are huge and both sides will have maximum leverage only as the last second approaches and the risk of a disaster is highest.
Besides, it's obvious that Democrats and Republicans remain miles apart. Obama has said he'll consider ways to raise tax revenue that don't require the higher tax rates on the wealthy that he'd prefer, which is a nice concession, but it still won't raise the $1.6 trillion in new tax revenue he's demanding. Republicans have blinked on their long insistence that taxes must never go up, but now Democrats appear to be overplaying their hand by hinting that they won't agree to any of the spending cuts Republicans will require in order to make a deal. All of this jousting means that these jokers are at the very beginning of negotiations, and nowhere close to the end.
... And the deadine will probably get extended, anyway. It's possible that lame-duck legislators will somehow ink a deal on huge fiscal priorities in the waning moments just before a long Christmas break. But come on. The most likely way for the year to end is with an agreement to postpone the entire deadline by three or even six months, effectively accomplishing nothing. That would give the next Congress more wiggle room to take up big matters that can't be addressed now--like entitlement reform and a tax overhaul--and allow every negotiator to get his pet issues addressed.
There will be costs to a delay, perhaps including another downgrade to the U.S. credit rating. And everybody girding for some kind of definitive showdown at the end of 2012 will have to exhale, then get ready to go through it all over again. But that's all the more reason to stop worrying about the cliff now, because it is very likely to require our attention in 2013 as well.
Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.
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