July 22, 2012

GOING ALL THELMA AND LOUISE ON US:

Obama Should Head for the Fiscal Cliff (Bill Keller, 7/22/12, New York Times)

In January, two fiscal time bombs planted by Congress are due to explode. On Jan. 1, all the Bush tax cuts expire, constituting a $400-billion-plus tax hike in 2013. The next day -- unless Congress agrees on a major deficit-reduction plan -- a fiscal discipline known as sequestration will slash about $100 billion a year from federal spending, divided between defense and nondefense.

Blanket repeal of the tax cuts and across-the-board spending reductions are both pretty bad ideas. Taken together they are a kind of grotesque, automated austerity program. Lawmakers of both parties are desperately seeking ways to evade some of the consequences. Republicans are more focused on sparing the defense budget, and Democrats are pressing to preserve the middle-class tax cuts.

Republicans know that revenues have to be raised and Defense cut.  Democrats know everything else has to be cut too.  Driving over the cliff gives both what they want with plausible deniability.



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Posted by at July 22, 2012 9:36 AM
  

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