It's time for America to do the right thing over the 'fiscal cliff' When Barack Obama secured his second term in the White House in November, the approach of the so-called "fiscal cliff" seemed a distant enough prospect for good sense to prevail and a deal over the US budget to be done. Now, with just four days left before a toxic mix of spending cuts and tax increases automatically takes effect unless agreement is reached, this has become a matter of great import not just to the Americans but to the whole world. President Obama's decision to cut short his Christmas holidays to return to Washington is an indication of how serious this stand-off has become. There is an assumption that, faced with the edge of the cliff, everyone will step back and conclude a deal. As Churchill reputedly said in the context of the Second World War, the Americans "can always be trusted to do the right thing, but only once all other possibilities have been exhausted." If so, they are leaving it until very late in the day. The chances of achieving an all-encompassing agreement - a Grand Bargain - now seem remote; yet leaving this matter to be resolved in a piecemeal fashion in January is dangerous. The brinkmanship on show on Capitol Hill is, in part, a legacy of a fractious presidential election that compounded a deep-seated distrust between Democrats and Republicans. The fiscal cliff has been created by the expiry of various tax-cutting and budget control measures intended to get a grip on American debt. But instead of scaring the warring factions into making a deal, it has become an opportunity for political posturing and a further example of the dysfunctional nature of the American political system. Economic stability appears to have been abandoned in favour of infighting and point-scoring. Worryingly, the two sides seem unable to agree on the question, let alone find an answer. Ronald Reagan once said that government was not the solution to America's problems: it was the problem. He meant this as a criticism of excessive state spending and interventionism. But government at all levels still has a role to play in finding solutions. President Obama has many strengths but reaching out to his political opponents is clearly not one of them, and he also insists that his election victory gives him a mandate to tax the rich more. For their part, the Republicans are exhibiting the same ideological narrowness that cost them the election. Depressingly, the next few days risk being less about finding a solution and more about manoeuvring to see who takes the blame if the worst happens. For the good of America and of the faltering world economy, it is time Congress and the White House proved the accuracy of Churchill's dictum - and did the right thing.