No deal may be the best deal
Bring On the Fiscal Cliff
By DAVID A. SUPER, NYT
Washington
DISCUSSING the federal budget negotiations should come with a warning label: “Caution — talk of the ‘fiscal cliff’ may induce hyperventilation, blurry policy vision and confusion.”
Take the last of these. According to a recent poll, Americans believe that, if there’s no negotiated settlement between President Obama and Republicans in Congress, the budgetary changes set to take effect on Jan. 1 will enlarge the federal deficit. In truth, going over the cliff — that is, accepting the “last ditch” spending cuts agreed to in August 2011 as well as the expiration of the Bush-era tax cuts — would have the opposite effect: it would reduce the deficit. That, after all, has been the aim all along.
But even those who understand this often misjudge the likely impact of these automatic program cuts, known as the sequester, and the tax changes. Indeed, a closer look at this much-feared budget buzz saw reveals it’s better for the country than any likely deal would be.
Those who warn feverishly about the danger of the “cliff” cite two reasons. First, they say that the total amount of deficit reduction is too great — and, second, that huge federal spending cuts in the midst of a still-weakened economy would plunge us into recession.
(More here.)
Washington
DISCUSSING the federal budget negotiations should come with a warning label: “Caution — talk of the ‘fiscal cliff’ may induce hyperventilation, blurry policy vision and confusion.”
Take the last of these. According to a recent poll, Americans believe that, if there’s no negotiated settlement between President Obama and Republicans in Congress, the budgetary changes set to take effect on Jan. 1 will enlarge the federal deficit. In truth, going over the cliff — that is, accepting the “last ditch” spending cuts agreed to in August 2011 as well as the expiration of the Bush-era tax cuts — would have the opposite effect: it would reduce the deficit. That, after all, has been the aim all along.
But even those who understand this often misjudge the likely impact of these automatic program cuts, known as the sequester, and the tax changes. Indeed, a closer look at this much-feared budget buzz saw reveals it’s better for the country than any likely deal would be.
Those who warn feverishly about the danger of the “cliff” cite two reasons. First, they say that the total amount of deficit reduction is too great — and, second, that huge federal spending cuts in the midst of a still-weakened economy would plunge us into recession.
(More here.)
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