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The Rahn Curve and the Growth-Maximizing Level of Government - YouTube 
12th-Dec-2012 05:04 pm

The fiscal cliff promises large spending cuts. Good.

The fiscal cliff raises taxes, not so good.

But large spending cuts are very difficult to get, while tax changes appear to happen annually.

So I'd pick the fiscal cliff option.
13th-Dec-2012 05:14 pm (UTC)
I still don’t see how the ‘fiscal cliff’ promises spending cuts. You have an administration that has been blowing unprecedented wads of money for four years without even trying to pass a budget. If the constitutional requirement of an annual budget wasn’t enough to slow them down, why should anything so paltry as an act of Congress?
13th-Dec-2012 07:07 pm (UTC)
Budget Control Act. The automatic spending cuts or sequester legislated by the Budget Control Act of 2011 will hit January 2. Half of the scheduled annual cuts ($109 billion/year from 2013-2021) will come directly from the national defense budget, half from non-defense. However, some 70 percent of mandatory spending will be exempt.

Extended Unemployment Benefits. The eligibility to begin receiving federal unemployment benefits, last extended in February, will expire at year's end.

Medicare "Doc Fix. The rates at which Medicare pays physicians will decrease nearly 30 percent on December 31.

From here.

Are these fabulous things to cut? Maybe not. Do we need more cuts on top of this to avoid an even bigger problem ahead? Why, yes, yes we do.

But cuts make politicians unpopular, so they are hard to get. Tax reductions, on the other hand, are popular. and so easy to get. I'm in favor of picking the option that gives me the highest cuts.
13th-Dec-2012 07:15 pm (UTC)
As I have read, the administration has already proclaimed that the sequestration is a dead letter and said that it will not implement those cuts. In any case, the administration has already spent trillions of dollars without congressional authority in the form of a budget. If it did make those cuts, there would be nothing to stop it from reinstating them the next day in the form of new spending. Nothing, that is, except the law, the Constitution, and the authority of Congress, all of which Mr. Obama has been ignoring every day for the last four years.
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