Tuesday, January 8, 2013

Fiscal Cliff Optimism

I'm not the only one who thinks the fiscal cliff deal was a good thing.

David Henderson begins his thoughts on the deal by saying, "Pssst: Someone tell the Republicans they won." Like me, Henderson compares the deal to what would have happened without it, rather than some ideal version that never would've passed the Senate. Henderson, however, goes into far more detail than I did.

Among the many negative responses to Henderson's post I've seen, only Bob Murphy seems to understand that it's the baseline that matters--that is, what would have happened without the deal (even though Murphy still disagrees with Henderson).

Yuval Levin at NRO (ht) approves of the deal for political strategy reasons. He says, "For liberals, this was not a moment of danger to be minimized but by far their best opportunity in a generation for increasing tax rates," and they got far less than they could have just by doing nothing and going over the cliff. "Having discovered an effective political wedge in the tax debate, the Democrats have now basically used it up and gotten awfully little in return."

Finally, if you're still not convinced that the deal was a good thing, take a look at the latest newsletter from the Socialist Equality Party. The self-described socialists hate the deal. In the opening paragraphs, the author echoes Levin's observations on political strategy. In the 7th paragraph, he gives a list of reasons to hate the deal that pretty closely mirrors Henderson's reasons for liking it. If it's that bad for the socialists, it has to be good for the rest of us.

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