That fiscal cliff: Let optimism reign

Posted: December 17, 2012 in economy
Tags: , ,

THERE’s a kind of morbid fascination about America’s approach to its so-called “fiscal cliff” — that dangerous bit of topography when, at the start of 2013, George W. Bush’s tax cuts expire and automatic spending cuts begin. Look on the gloomy side and the American economy will slip into recession. But this particular Cassandra is an optimist: surely even the polarised politics of America will not push its politicians to jump over the precipice in the name of partisan ideology? And I am heartened by two things: one is a positive piece in The World in 2013 and the second is proof today that when Cassandra is pessimistic he is proved wrong. Attentive readers may recall my prediction that India’s cricketers would inevitably beat England’s in the test-match series that ended today. Happily (and almost incredibly), England celebrates its first series win since 1985. But before I get carried away by sporting enthusiasm, let me direct readers first to a piece in the New York Times by Nobel economics laureate Paul Krugman (who never misses a chance to lambast the Republican Party) arguing that America’s “trillion-dollar deficit” should not scare us, and then to this excellent explanation by The Economist of America’s long journey to this frightening fiscal cliff.

via Economic Crisis


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