I'd been wondering, even if Obama and the Republican House did reach an agreement to avoid the fiscal cliff, how it would be possible to negotiate all the crucial terms before the Christmas recess.

From yesterday's proposals, I now understand. They are not trying to negotiate what you and I would view as an agreement with substantive terms. Instead what they are trying to negotiate is just the numbers. For example:

1) $800 billion of tax revenue increases, from "millionaires and billionaires" or at least from "the wealthy"; and

2) $1.2 trillion of spending "cuts", of which (i) $400 billion would be from Medicare and Medicaid (but of course no benefits would be cut, so would have to come from "administrative savings"; and (ii) the remainder to come from "wind-down" of the Iraq and Afghanistan wars.

They would then congratulate themselves, and maybe each other, on the wonderful compromise they have reached to save the American people from going over the cliff. And the stock market would go up initially and then straight down as it did after Obama's election. And any substance would be put over to the first half of 2013, when there is far less media and public attention, to try to work out how these numbers are to be achieved (to the extent they are to be achieved at all).

Far better to go over the cliff. At least then the American people would have a half-way honest view of where we stand.


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