Much of today’s press coverage highlights the points I made yesterday—that is, how the fiscal cliff deal hasn’t really solved any of the problems and just sets the table for the next crisis in a couple of months. All true, but we are where we are.

Now, the question is this: How do we prepare for and resolve the next crisis? I think everyone agrees this is no way to run a railroad. What we’ve learned in the latest debacle, though, is that there is a way around the current dysfunction.

A year that investors can celebrate

The news this morning is that at the last minute, after actually going over the cliff, our government officials have successfully covered their butts and kicked the can down the road for another two months. If that doesn’t sound like a ringing endorsement, it isn’t.

Let’s look at what the legislation actually does. Today, the Washington Post published a good cheat sheet.

At the end, when all’s said and done, much more is said than done. Today, the deadline for averting the fiscal cliff, we certainly see that in spades.

It’s not the end of the world—that will be next year, if Congress refuses to raise the debt limit and the U.S. defaults—but it isn’t good.

The stories today are all around the fiscal cliff, of course, and the woeful inability of Congress to accomplish anything other than trying to shift the blame. One of the most annoying memes is how annoyed the representatives are to be stuck in Washington over the holidays.

Back in 2011, during the last debt ceiling debate, the U.S. went into what could reasonably be described as potential default territory. We are nowhere near as close to that as we were then, but we are starting the downward slide, with Treasury Secretary Tim Geithner quoted over the weekend as saying that we will hit the federal borrowing limit on Monday (i.e., New Year’s Eve), which is to say in a couple days.

At that point, the Treasury will start to take certain “emergency” measures—I put that in quotation marks because we were here in 2012, and the only emergency is Congress’s unwillingness to act—which will allow the government to pay its bills for a limited time, probably a couple months, and avoid a full-blown debt crisis for that period. Timing is uncertain because it depends largely on the tax and spending agreements reached with respect to the fiscal cliff. How much money is raised and spent will be critical in determining how long the Treasury can juggle bill payments. We won’t know that until—and if—Congress acts on the fiscal cliff.

I have renewed confidence about the ability of the Germans to solve any and all problems associated with the euro, after spending several hours yesterday building a play castle for my son.

“If Boehner can’t bring his plan B to a vote and win, he probably won’t be able to successfully sell any more comprehensive deal—and we go off the cliff.”

The quote above is from yesterday’s post. As you may have noticed, the world didn’t end last night, although it has changed significantly per that quote. Speaker Boehner could not bring his plan B to a vote—he pulled it once it was clear he didn’t have the votes—much less pass it, and now the complexion of the negotiations has changed again.

All of the preceding analysis is based on the assumption that the fiscal cliff is averted and that a deal, which phases in any tax increases and spending cuts over time, rather than imposing them all on January 1, is cut.

Seeing as the world will be ending tonight, that seems to be the only appropriate headline. I’ve stocked up on champagne this week; if I have to go, I want to go with a nice demi-sec—Veuve Clicquot, to be exact—and my family around me. There’s another couple of bottles in the refrigerator, just in case we have to wait a bit.

On the other hand, if I don’t have to go, I had better get going on the commentary. In this case, I think the markets are, in fact, a good predictor of the future, as they don’t seem to indicate a significant chance of the world ending. Although they were down a bit yesterday, I would expect a bit more of a sell-off, really, if the world were ending.