The Fiscal Cliff Will Turn Us Into Europe
Posted at 12:15 p.m. on Nov. 19, 2012
Tim Duy argues that jumping off the “fiscal cliff” would be “fiscal madness” because the “tax increases and spending cuts in place promise to repeat the mistakes of the UK and the Eurozone by pivoting too fast and too hard into the realm of fiscal austerity.”
“If markets are shaky, they are shaky because participants recognize the recessionary impact of this level of fiscal austerity and they don’t like it. Market participants want Congress and the President to…minimize the impact of spending cuts.”
What’s the matter with Europe?: “For Draghi…a fiscal union is just a mechanism to control spending. And controlling spending has done little more than push the Eurozone deeper into recession. Draghi might have prevented financial collapse, but the price he extracted ensures ongoing recession nonetheless. ”
Sober Look puts the major components of the “fiscal cliff” in context with other recent unplanned government expenditures, noting that the “fiscal cliff numbers pale in comparison”
