What Just Happened?

"The United States averted economic calamity on Tuesday," reports Reuters with a straight face. We begin the new year dying to edit this news headline. Here's our version:

"The United States postponed certain economic calamity on Tuesday."
Alas, we haven't understood the term "fiscal cliff" since we first looked up the term anyway. Only in Washington are measures intended to restore fiscal sanity considered a threat. Best we could tell at the time: Fiscal cliff is "a term Democrats apparently wield to scare voters into thinking they'd be better off with higher taxes."

To no one's surprise, the White House and Congress did just that. The House signed a version of the Senate's bill late last night. The president added his John Hancock. And... your taxes will go up.

  In the meantime, as the can clamors down the scree, let's calculate the damage. Apologies in advance if you're still suffering a pernicious New Year's hangover:

•  The "Bush tax cuts" are now permanent -- or as permanent as anything is in Washington -- except for...
•  Couples who make more than $450,000 will revert to Clinton-era rates (single $400,000). In addition, their tax rate on dividends and long-term capital gains jumps from 15% to 20%
•  Itemized deductions and the personal exemption start phasing out on couples' incomes above $300,000 (single $250,000)
•  Remarkably, the dreaded alternative minimum tax (AMT) has been patched "permanently"

•  The estate tax exemption falls from $5.2 million to $5 million; the rate jumps from 35% to 40%.

  The employee portion of the payroll tax reverts to the pre-2011 rate of 6.2%. That means taxes will rise for 77.1% of U.S. households, according to the Tax Policy Center.

At least the Social Security "trust fund" will get a few more worthless IOUs, so it's all good, right?

  What about spending cuts, you ask? Heh.

$30 billion in spending was added: Extended unemployment benefits -- the straight-up welfare program that kicks in after the 26 weeks of insurance runs out -- will carry on for another year.

  At least we're guaranteed a few more political "showdowns" before the first blossoms of spring. Otherwise, what would we do with our time?

The $110 billion in automatic spending cuts that were supposed to kick in yesterday -- the "sequester" that was part of the summer 2011 debt ceiling deal -- have been put off till the end of February.

A "continuing resolution" -- quick-fix legislation to cover for the fact lawmakers can't draw up a real budget -- expires on March 27.

If you have an excellent memory -- or a government contract -- you will recall the last of those items nearly triggered a "partial government shutdown" in the spring of 2011.

We should be so lucky.

  While all this was going on, the government unceremoniously bumped up against the debt ceiling again on Monday.

Or so Treasury Secretary Timothy Geithner says: Treasury's own website is updated only through last Friday. It pegged the national debt at $16.336 trillion -- $58 billion below the ceiling of $16.394 trillion.

The Treasury is now resorting to borrowing from government pension plans, as they did 18 months ago, to make ends "meet."

Ha. Ha. Ha.