Barack Obama hailed the Democrats and Republicans finally reaching a deal to avert America going over the Fiscal Cliff, claiming that the deal was “just one step in the broader effort to strengthen the economy.” But is there any reason for optimism when the deal implement tax rises and delays implementing spending cuts for two months. Congress had the oppurtunity to really adress the issues that were facing the American economy namely an over inflated state however increasing taxation on the wealthy will not be the best solution. Accepting that the state is too large and unsustainable and implementing the neccesary cuts would have been the correct action, It seems that politicians are afraid to confront the elephant in the room. Rhetoric is not the solution to the economic burdens on the state instead action should be taken to reduce government spending to parity with revenues.
This is not confined solely to the United States of America, here in Britain the coalition has used rhetoric to suggest they are adressing the issues with the economy but the debt increases. We can expect economic affairs to play a key role in developments in 2013.