US budget process

"The most important thing to say about the situation of recent years is that the US federal budget process has completely broken down. Budgets have gone from being passed late to never, with government spending now allocated by some baffling system of continuing resolutions and last-minute “cliffs”. There appears to be nothing anymore like a sensible process for making future plans and sticking to them." -- Peter Woit

Cyprus

I've written nothing about Europe for months, and thought perhaps I should mention Italy (rise of Grillo's 5-Star Movement).

But suddenly Cyprus has the limelight. Eurozone finance ministers imposed a deposit tax in order to fund a bailout; and the popular outrage, and threat of a bank run, has caused a drop in the markets as far away as Australia.

I find this peculiar; Cyprus is a small country. Why should events there have such an effect? Is this just mindless panic - "bad news from Europe!" - that will be forgotten after a few days, or is there actually reason to think that Cyprus matters this much?

I know there's lots of Russian money there; I assume the country has been affected by the Greek crisis. But I still think I'm missing something.

Cliff cut chaos

I chose that tabloid title because posts here about America's fiscal woes are mostly a list of milestone events, to be gathered into the one timeline at a future date; and although the buzzword of the moment is "sequestration", that is so uninformative that I could glaze over and miss it. No, the story is that the fiscal cliff was avoided at the start of 2013 by a deal between Democrats and Republicans; they couldn't agree on everything, so they avoided the cliff while deferring certain issues, by agreeing that big cuts in the budget of government departments would come in automatically, in two months' time; and now it is two months later, and the cuts are about to occur.

edit ZH argues persuasively that this is all still epiphenomenal.