Thoughts on the Fiscal Deal

Mark collected some reactions to the fiscal deal.  Brad DeLong doesn’t understand the Obama Administration: The big reason to make a deal before January 1, 2013 was that detonating the “austerity bomb” would impose 3.5% of fiscal contraction on the U.S. economy in 2013, and send the U.S. into renewed recession. It was worth making […]

Realism about the fiscal cliff

Summary: The fiscal cliff dominates the news. What will happen if we fall off it. How we can avoid it, preferably by easy painless solutions. Here we peel back the consensus wisdom to see what lies beneath. We’ll look at the cliff from different perspectives. Contents (1)  It’s not important For three decades the results […]

Fiscal Cliff Notes: Interpreting the Deadline News

Here is an all-time first:  Market rallies on news that Congress will be in session! That was today’s story.  The market gyrations lacked a grounding in reality.  Joe Weisenthal charts the day, with my comments to follow. Here are a number of rhetorical questions: After weeks of public posturing on both sides, would we really expect […]

The Only Way Left to Beat Republican Fanatics: Call Their Bluff and Go Over the Cliff

President Obama is cutting his Christmas holiday short, returning to Washington for a last attempt at avoiding the fiscal cliff. But he’s running headlong into the Republican strategy of fanaticism. It’s a long-established principle of game theory (see Thomas Schelling’s classic 1956 essay in the American Economic Review) that a fanatic who restricts his freedom to […]

Kill the “fiscal cliff” instead of the Economy

Everyone now agrees that the so-called “fiscal cliff” is a stupid policy that threatens our economy and our people.  Everyone agrees why the “fiscal cliff” is stupid – it inflicts austerity at a time when it is likely to throw the nation into a gratuitous recession.  Causing a recession leads to increased unemployment and a […]