Sunday, November 20, 2011

No debt deal is still a win

Even if the joint congressional debt/deficit super-committee fails to arrive at some grand deal by tomorrow, as now seems likely, this is still a "win" for everybody but Congress and the two political parties since we will still automatically see $1.2 trillion in across the board spending cuts in 2013.
And, the Bush tax cuts automatically expire at the end of 2012 within any "action" required by Congress, equivalent to another $800 billion over ten years. Between the two, plus incremental economic growth as the recession recovery gradually build steam, plus winding down of Iraq and Afghanistan, plus winding down of corporate tax deductions for losses during the financial crisis, and the result is that two years from now the federal budget deficit won't look anywhere near as bad as it does today in hindsight.


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