On December 31, the Bush tax cuts will all expire and, by the terms of the last government-shutdown compromise, spending cuts (especially to the military) will go into effect automatically. Such a double-whammy in the middle of an economic downturn would have dire effects, according to most experts, who are warning about the danger of this “fiscal cliff.” But some people are saying that we should just jump off that cliff:
The very notion of a “fiscal cliff” suggests that the country is approaching a calamitous drop-off at the end of the year — and it would be tantamount to suicide to jump off.
But a contingent of policy wonks and Democrats insist that letting the Dec. 31 deadline come and go — thus triggering automatic tax increases and spending cuts — could produce the best outcome for the country. Once the tax hikes have kicked in, the reasoning goes, Republicans would be hard-pressed to roll them all back and would have to accept a deal on taming the deficit that contains more new tax revenue than GOP lawmakers want.
So some policy analysts and legislators say they are willing to go over the brink—and some are even gunning for Congress to do it.
Call them the cliff-divers. [Read more...]