Why is everyone talking about the fiscal cliff and no one talking about the expiration of the Bush tax cuts?
The Bush tax cuts are the immediate source of the government's fiscal 'woes' (assuming the government has any, hard to see it from Treasury's borrowing costs, but I don't want to needlesly insult conventional wisdom by speaking too much truth to power, or whatever). Those 'woes' are the justification for that Simpson-Bowles business which is the fiscal cliff. Voila, let the Bush tax cuts expire at the end of 2012. Strike a Democratic blow for fiscal responsibility. And it's probably the only avenue in the next four years to restoring some fairness and progressivity to the federal tax code.
Start 2013 staring at the fiscal cliff. Maybe it won't seem so awful. And if the Republican House retaliates for allowing the tax cuts to expire by pushing the country over the fiscal cliff, well, if a recession ensues, Team Obama's job is to clearly and convincingly show the country whose fingerprints are all over it. That should be no hill for a climber.
Wednesday: FOMC Announcement, CPI
3 hours ago