The Challenge of Small Things
If you’re not reading WonkBlog on a regular basis, you should be.
But the apparent victory comes with many clouds. As my colleagues Zachary Goldfarb and Jim Tankersley have argued, the deal doesn’t solve any of the major issues haunting the economy: In the short run, it offers no large-scale stimulus to try to get the economy back to full employment. It offers no longer-run strategy to reduce the budget deficit to sustainable levels. And it leaves a situation in which policy uncertainty will hang over the economy, starting with the next fight, over raising the debt ceiling in about two months.
In the end, the deal that averted the fiscal cliff was a small deal that leaves us waiting for the next fiscal cliff or debt ceiling battle or what have you. What disappoints me is not that progressives didn’t get everything we wanted out of the deal – it is the nature of democracy that compromises are made and it is the nature of compromise that things must be given up – but that there was what seems to have been an inordinate amount of struggle to remain a situation very much like the one we were already in.
One wonders how long a republic can sustain this level of dysfunction.