I've said many times that John Boehner is going to get owned by the Democrats in the debate over what to do about the fiscal cliff. Here's what I see will happen. 1. Nothing will get settled before January 1st. The Clinton era tax rates will become law. Your first paycheck of the new year will have a bit less money in it. If you are near the national average that will be about $40 - $45 less in take home pay. The citizenry will be in a furor. 2. Harry Reid and the democrats in the Senate will take the lead and propose tax cuts for 98% of Americans. That's right, tax cuts for those that make less than $250,000. They will promise to put tax rates back where they were for 98% of Americans. Democrats will take over the mantle as the party of tax cuts. There might be some movement on the income level where the tax cuts expire, perhaps at $400,000 instead of $250,000. 3. There will be very little talk of spending cuts because the tax rate issue will dominate the news. Quite the contrary, new spending on the unemployment benefits will be extended. Boehner will try to link extension of unemployment benefits to spending cuts, or "pay as you go", but will fail. 4. The 40 stubborn mules in the House that refused to go along with John Boehner's Plan B will call for his ouster and for a new House leader. 5. Whoever the House leader is in February will once again use spending cuts as a negotiating tool to bargain with Obama on raising the debt ceiling. Once again no agreement will be reached, the U.S. credit rating will be lowered (again), the stock market will drop like an anchor and THEN there will be token spending cuts agreed to and the debt ceiling raised. I would guess the spending cuts will be equal to whatever new revenues will come from the new tax rates on the wealthy, say, $500 billion over 10 years. 6. Your 401k and IRA's will have lost about 20% of their value, meaning it will take about 4-5 years to rebound to the levels your account balances were at today. In conjunction with the years 2008-2010 it could turn out to be a lost decade for investments. In the future this will be Obama's legacy--"the lost decade"--along with Obamacare. 7. The Republican Party will be on their way to obscurity.