Jan. 3, 2013
This fiscal cliff: averted.
Next fiscal cliff: ahead.
Partisan divisions and brinksmanship politics defined the outgoing Congress right up to the final scramble to avoid the "fiscal cliff." The last-ditch deal dodged income-tax hikes for nearly all Americans and delayed for two months spending cuts for the Pentagon and domestic programs.
Still, the compromise didn't solve, or even seriously address, the deficit problems that prompted Congress to write the laws that nearly forced the nation over the cliff in the first place...
The potential for the United States to default on its debt is a far more terrifying economic threat than the fiscal cliff posed, says Bill Hoagland, a long-time GOP congressional budget aide now with the Bipartisan Policy Center, a Washington think tank.
"That's what scares me more than anything else," he says of the global ramifications of a default. "If we lose the ability to be the best place in the world to lend money to, then we really have real problems."
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Economic Policy Project