Judging the Fiscal Cliff Small Deal
Posted at 12:30 p.m. on Dec. 26, 2012
Matthew Yglesias is happy to hear that the grand bargain on the “fiscal cliff” may finally be dead.
“The grand bargain…is impossible and pointless and its relentless pursuit is positively harmful since it generates these damaging crises… Officially Obama’s idea is that we try to do the lesser bargain now, and then that gives us plenty of time to keep working toward the grand bargain. That’d be a mistake. What Obama ought to do is try to reach a lesser bargain as soon as possible and then shift to addressing almost any other problem under the sun.”
However, Ezra Klein notes that the most likely “small deal” isn’t very good for the economy.
“That would likely include the Senate tax bill, some policy to turn off at least the defense side of the sequester and a handful of other policies to blunt or delay various parts of the fiscal cliff… Depending on how much of the fiscal cliff gets delayed, we could tip into recession anyway.”