Some pundits on why "going over the fiscal cliff" might not be such a bad thing.

[randomness]

I wasn't particularly surprised Jonathan Chait came out in favor of letting the tax cuts expire and letting the sequester's mandatory spending cuts take effect:

In reality, nothing bad is likely to happen at the beginning of January. The automatic tax hikes and spending cuts will occur cumulatively over the course of an entire year. The Obama administration can delay implementing even the first dollar of the austerity, and even if we do have a few weeks of higher taxes and spending cuts, it can be retroactively canceled out once a deal is completed. The metaphor of a “cliff,” in which one step over goes all the way to the bottom, is utterly misguided.

...

What will change on January 1 is bargaining leverage. Once the Bush tax cuts have expired, then the two parties can much more easily agree on a deal to pass a big tax cut and substitute cuts to Social Security and Medicare for the scheduled cuts to discretionary spending. As a side benefit, the dreaded Grover Norquist tax pledge will be technically moot. Liberals such as me like this idea a lot.

It was also not much of a shock to hear that Matt Yglesias agrees:

Politics aside, there's no serious argument to be made against the idea of sending all the members of Congress home and then negotiating on budget matters under the new baseline. From the new baseline, all Democrats and Republicans disagree about is how much to cut taxes by and how much to increase spending. Those are issues where compromise can be found. It'll take some negotiating, but it can get done fairly easily.

But now Megan McArdle is joining in:

So maybe the first cliff—the one coming in January—is the lesser of two evils. It just might achieve what white papers and impassioned pleas have so far failed to do: scare some sense into our legislators.

Personally, I'm all for letting the sequester take effect if it actually reduces the money going to the military-industrial and security-industrial complexes. Cynic that I am, however, I'm sure our elected representatives will find a way to make sure the war and internal spy lobbies don't lose a dime. I'm in favor of spending cuts if the budgets for Defense and Homeland Security get cut.

Comments

[fin9901.livejournal.com]

They're not the only ones thinking that. Apparently the latest offer from Obama is $1.6T in tax hikes and no spending cuts at all, and needless to say the reaction to that on the Republican side of the aisle has been less than complimentary:

CHARLES KRAUTHAMMER: It's not just a bad deal, this is really an insulting deal. What Geithner offered, what you showed on the screen, Robert E. Lee was offered easier terms at Appomattox, and he lost the Civil War. The Democrats won by 3% of the vote and they did not hold the House, Republicans won the house. So this is not exactly unconditional surrender, but that is what the administration is asking of the Republicans.

http://www.realclearpolitics.com/video/2012/11/29/krauthammer_on_fiscal_cliff_negotiations_republicans_ought_to_simply_walk_away.html

[quietann.livejournal.com]

This actually makes sense. My job is under minor threat if sequestration happens, but minor.

[r-ness.livejournal.com]

Yeah. McArdle's backed by the Koch brothers, which is why I thought her coming out in favor of letting the cuts happen was noteworthy. That Krauthammer thinks so too means more conservative pundits may be okay with it. He's saying no deal rather than a bad deal. I can totally get behind that. I just expect the natural inclination of Congress is to do a bad deal.

It wouldn't be a big surprise to me if the word among the pundit class is that the negotiations are doomed so it's time to write articles on why this isn't going to be such a bad thing. It's been so hyped up to now that they'd look really dumb if January came without a deal and life went on anyway.

"Fiscal cliff" was a phrase Bernanke came up with. I didn't think it was a particularly good description in the first place.

[r-ness.livejournal.com]

Frankly I doubt sequestration in anything like its current form is actually going to happen even if a deal is postponed until the next Congress.

[awfief.livejournal.com]

Interesting. I haven't believed it's a cliff anyway, tax stuff never is. Also, so far as the "security-industrial complex", I was reading this http://www.dailypaul.com/264749/the-tsa-as-we-know-it-is-dead-heres-why earlier, and it was also interesting.

[fin9901.livejournal.com]

Yeah, I've been saying for a while now that we're already over the fiscal cliff (4 straight years of $1T+ deficits will do that), and the only question is whether we're going to have a hard landing, or a crash landing. Kicking the can down the road only lowers the ground, which will make the crash that much harder when it happens.

[achinhibitor.livejournal.com]

Everyone I've read suggests that total defense spending has got to go down, and everybody knows it. Like the tax deal, the question is how to label it so the Republicans don't have to look "soft on defense".

[r-ness.livejournal.com]

I really hope you're right about that.