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View Diary: What is the Fiscal Cliff, and Why do they Fear it? (55 comments)

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  •  This comment right on point (0+ / 0-)

    Thanks for weighing in.  I have mixed feelings about Ezra.  I am a quant and I respect other quants, but there have times when I checked Wonkblog's sources and they misinterpreted them or relied on someone's misinterpretation of the source.  I think this is the case with this diary's cited blog.  Your comment more accurately assesses the fiscal cliff than the Khimm blog which grossly understates the impact.  

    I oppose a grand bargain on multiple grounds.  It would move us to the right when the country needs to move to the left.  I doubt that a reasonable bargain can be reached with the Republicans.  I am highly skeptical that we need to change social security/ medicare/ medicaid.  I am highly concerned that the grand bargain will also push us into recession.  

    One the other hand, the Congressional Budget Office predicts a recession from the impact of the fiscal cliff.  Dr. Paul Krugman probably agrees. The voters had doubts about President Obama's handling of the economy but they voted for him anyway because they understood that he would do a better job than Romney and the Republicans.  Is a recession to be the reward for this support, either from the fiscal cliff or a grand bargain?  Democrats will be killed in 2014.

    Back in 2010 everyone was more worried about the sustainability of deficits than the recession.  Only Dr. Krugman seemed to be arguing for more stimulus.  No one else seem to be willing to learn from the mistakes of the great depression.  Events have now proven this approach to be wrong.  Now the IMF and even the rating agencies are backing away from austerity.  Yesterday the chickens came home to roost to the biggest austerity booster of them all, Germany.  That is why pundits are pulling a Romney flip-flop and reversing their position.  The issue needs to be addressed again. I don't say reach across the aisle, though: instead President Obama needs to take it on the road and continue to reach out to America.  But we need to kick this can down the road until the economy is stronger.  I would love to raise taxes on the top 2% but I just don't think this is realistic at this point in time.

    Coffeetalk, I wrote a diary here with one approach for doing that.  I would appreciate your thoughts on it.  Also what's your source for the 730, it appears somewhat higher than the numbers I saw (Bloomberg)? I would like to use it for a diary I am writing that will include a survey expanding on my thoughts here and in my other diary.  

    Dedicated to recapturing the American Dream by changing the framework of the debate to focus on: Growth, Efficiency, Community, Sustainability and Economic Fairness. Improve constantly and drive out fear - Dr. W. Edwards Deming

    by Paradigm Change on Thu Nov 08, 2012 at 08:12:21 AM PST

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