By Fredrick D. Schaufeld

So here’s something controversial: “fiscal cliff” is just a bad marketing catch phrase. The US will either “fall off” or it won’t; Congress and the President will either make a deal or they won’t; we will either “rise above” or we won’t… and from a long-term economic perspective, it really won’t matter that much. Come 2013, I’m bullish on America either way!

Despite all of the hardships and despite all of the pain the country has suffered over the past few years, the American economy is actually on such an incredibly strong footing at this point in history that it is almost impossible for politicians to screw it up. That’s not to say that in the next year or so there may not be 1,000,001 true stories about tough times caused by dislocation in our economy. But, that is to say that over the next decade, as a result of our macroeconomic situation, if our national politicians do not get us into another war or get themselves thrown out of their offices for Tweeting pictures of their genitalia, they will collectively come out looking like geniuses.

Only 2 Things You Can be Sure of: Debt and Taxes

Despite our low political expectations and our hyperbolic discourse, there’s a reality we need to face: our national debt “crisis” is overstated and, frankly, is already pretty much over.

Don’t get me wrong, we’ve got a lot of debt and it is like a fire that can heat up or burn down our collective house, but the “crisis” part is actually in the past. Bad debts have been written off; properties have been written down; losses have been taken; and a tax increase is already law—the best kind of law—the kind we can blame on George W. Bush while we take credit for passing a “tax reduction” for at least some of our citizens. And spending cuts are already law too, which we can blame on the lame duck Congress. All we have left to do now is shift the dollars around a bit. But, from a long-term macro point of view, the die has already been cast and the US has already rolled its “number.” We don’t really need to pay off our debt; we just need to stop increasing it as a holistic percentage of our GNP across business cycles. And, the deal to do that is already in place.

Jimmy Carter said Life’s not “Fair!”

We don’t really need to get taxes right, and we’ll never get them to be “fair.” We just need to keep them relatively stable and predictable for a while (which Congressional gridlock will do for us) so we can plan and invest. What I mean is that we Americans will adjust to just about any system we can reasonably imagine (i.e., any set of rates that keeps working and investing as our best alternatives) once we’re resigned to having that system in place for a while.

Sure, we’ll make some dumb moves, like limiting charitable deductions, or pandering, over-regulating, “reforming” or “simplifying” through new laws which only further complicate things. But, in the big scheme of things, it’s going to take a lot of work to douse the flame of our basic economic engine.

Greed is Pretty Good

Sure, tax codes create winners and losers (particularly right before and after a major change in the code and during periods of uncertainty) and taxes always redistribute wealth (anybody who ever played Monopoly with Free Parking jackpots knows it keeps the game going way past midnight), but after election seasons end, the basic human desire to want more (aka “greed”) will keep us working and investing provided we reasonably believe that we’ll get most of the benefit of our work. As long as we stay above that threshold of “most,” even socialism is usually pretty tolerable, and here’s why:

First, comrade, despite sloganeering, successful capitalist systems always exist with some socialism (if it didn’t, who would pay for armies, or sidewalks or Braille signs at motor vehicle bureaus), the only thing for Congress to figure out is just how much socialism is optimal to protect and enhance our system and how much starts us goose stepping. (The answer: anything less than 49.9% on a total return basis and we probably won’t goose step.)

Second, once elections are over, and people stop being motivated by fear (which is that “death” force that makes for compelling TV commercials) and start back to their more normal greed motivation (their motivation to get everything they can out of the time called “life”), they adjust and make the best of the taxes as they are. Oh, and we might want to stop vilifying greed so much since that’s what motivates entrepreneurs (read: job creators) to risk everything and get up at 4:59 in the morning just because their cross-town competitor is getting up at 5:00. Forces of greed and fear move markets, and after having lived through a cycle more focused on fear, from a macroeconomic point of view, a decade more greed focused (or put in politically correct terms: more focused on “stimulating the economy”) is in fact pretty darn good.

The Cream of the Crap

According to the 2012 Corruption Perceptions Index, the United States is perceived as the 19^th least corrupt country. That makes us “the cream of the crap,” and that’s a pretty good place to be. Because, even though Luxembourg, Iceland and Barbados beat us out, most of the big guys that we really care about (the guys with their own printing presses, like Brazil, Russia, India and China) finished way below us. We provide “reserve currency” even for the BRIC countries themselves. I mean, who do you think is more likely to listen to lawyers and judges droning on about the “rule of law?” (Answer: Us.) And, who do you think is more likely to say, “the end justifies the means?” (Answer: Them. And, they know it too!)

And, all of that is notwithstanding that printing press we own, where (and I’m not proud of this part, but…) we have re-branded an Olympic move called the “Modified Madoff” to something now called “QE2 “ or “3” or “4.” We’ve branded it as though it was a fleet of luxury liners even though it’s more akin to a Mafia “skim.” But (based on the same “greed” logic that keeps us working as long as the government doesn’t take “most” of our efforts), we don’t have to be perfect when it comes to “fear” logic; we’re not competing against God. Our enormous markets just have to garner more trust than those in Russia and China.

If you’re fearful about where to put your money (even if you’re an oligarch), you’re going to put it in the US, because we withstand shocks like nobody’s business. You name it, we’ve already been through it, and often more than once: 2008, September 11^th, 1929. Computer modeling has not only sped up our absorption of information and has given us the ability to model downside scenarios, but it has also dramatically sped up our reaction times (just like it has with hurricanes). When our debt gets downgraded, it’s laughable (remember, everyone we compete against uses it). When our markets crash, it seems as though almost before we lick our wounds we’re complaining about the missed “buying opportunity.” And when worse comes to worse, we have that printing press to at least temporarily “smooth out” our shocks. Try getting that kind of service (or even a toaster-oven) from a bank in Greece or Barbados.

There are trillions of dollars that still need to be invested from the great wealth transfer we call “the purchase of imported oil.” We’ve marked down our real estate prices to move and US equity price-earnings ratios are as low as they’ve been since the mid-90s. That means expectations are now also lower (a bar we can walk over) and that implies that reasonable growth is now, well… reasonable… and reasonable growth doesn’t lead to busts as often.

Dogs are People Too!

And what about the waste, fraud and abuse we keep hearing about in our government? From a macro-economic point of view, don’t worry about that either! As long as the thieves are spendthrifts (which they tend to be) and prefer domestic Cadies over imported Lexi, they actually strengthen our economy. The faster dollars turn over in our economy (even dollars from thieves), the stronger our whole economy is. In fact, even while we preach thrift to our citizens (“Why can’t you be more like the sober Japanese net savers?”), mattress money hoarders hurt us and drunken, or preferably “tipsy,” sailors help (seriously).

Old Gold

Aging as a nation or as an individual is not a problem… it is an opportunity. It is an opportunity that we should proudly seize (ask the folks in Mozambique, who live half as long as we do, how they feel or ask the Cubans who, just above us on the list, like to rub their relative position in our faces).

There’s no question that Obamacare (as it will be modified and corrected in coming years… and it will) will ultimately improve our mass health care system and increase our longevity. We’ve come a long way, baby, to fix our cigarette addiction; we’ve come a long way to fix under-nutrition in America; and we’re actually even beginning to address our national over-nutrition problem.

But, there is a price to all this extra life. As we live longer, we will need to let people who either love their work or their co-workers so much that they want to stay employed an extra year or so do so. Same for a few older folks who just love the money and the things it buys. And that brings up something else good about America. Unlike in a lot of other countries, our old folks know how to spend (and stimulate needed demand in our economy). Our old people like to buy stuff, lots of stuff, and whether the stuff they are buying is fancy electronics or fancy medicine, physical therapy or designer scooters with sterile plastic tubes, it’s all good for our economy.

The Majority Minority

 We are a nation of immigrants and we are becoming a country whose future majority is today’s minorities. We have reduced the number of second-class citizens in the eyes of the law; our children hate fewer groups as groups; and, when we’re more tolerant and sensitive of individuals than we’ve ever been (even if some of the rules of our cutting edge political correctness are rewritten each year in pencil). And, we’ll get even more qualified immigrants when we expose and eventually overturn the stupid law that tells foreigners who we educate that once they’re actually good at something they have to leave the country and go live in foreign built houses and compete with us.

But why is this foreign infiltration a good trend for our economy? It is because these motivated youngsters fill in consumer demand and work where we oldsters leave off. Because we are immigrants and outcasts with something to prove, we are a creative, motivated, unsatisfied lot with an entrepreneurial risk-taking culture and ideas and approaches from all over the world. We don’t NEED to import innovation the way other societies do. We invent things like 3D printers because somehow our forefathers created a society where immigrant innovation culturally just flows from us.

…And One More Thing 

Our educational system may be flawed but it attracts students from all over the world, including oil-rich countries where 5 out if 8 high school classes are basically religious dogma. And, when students from those countries grow up, they’re going to find an America who, through the harvesting of natural gas and the focus on other alternative energy technologies, is energy independent.

Now, it must be mentioned that energy use still leaves us with a very serious environmental overhang that has to and will be solved. But let’s be realistic, we’re not going to willingly solve it at any real cost to consumerism or creature comforts (sorry Mr. Thoreau) but rather with investment and innovation which will in turn create even more future economic growth.

So, in Conclusion…

 I’m not saying that some people have not been and will not be hurt badly through rapid dislocation, uncertainty and stress, and I am not saying some of it will not be tragic, but I am saying that from low tide the tide only rises and that the seeds of our future macroeconomic success have already been planted (remember, the “next new thing,” the television, was invented during the depths of the depression).

And yes, there’s unfairness. We live in America, the most vibrant, fertile economy in the history of mankind. That’s not fair to the rest of the world. Our forefathers created an incredible experiment. It’s not that we’re perfect, in fact a lot of our strength comes from freely admitting that we’re not perfect–and generally not committing suicide or getting thrown out of our caste because of it.

When the Chinese economy surpasses ours later in the decade, who cares? They have a billion more people than we do to split it up with. If we get “downgraded” or “upgraded” or we fall off of some fiscal political campaign marketing buzzword, we will weather the dislocation faster than any economy in the history of man and, for the majority of the country, within 18 months this event will fall into irrelevancy.

So, if you want to have a great future, come to America right now and ignore the “fiscal cliff.” By the end of 2013, all arrows will be pointing up and to the right. If you’re a politician and you want to be known throughout history as a genius, swear yourself into office, keep your mouth shut and go along for the ride.