Austerity by default

October 26, 2010

Some folks want austerity in the worst way. They may just get it, says the NYTimes:

What could result is “deficit reduction by gridlock,” said John Podesta, the president of the progressive Center for American Progress and a chief of staff in the Clinton White House. That would be the outcome if Republicans, as expected, block additional unemployment aid and if the parties deadlock in the lame-duck session over pending appropriations and the Bush tax cuts that expire Dec. 31. That would leave lower spending levels in place for the fiscal year 2011 and force Mr. Obama and Republicans to try to reach a tax compromise next year.

Again, I find it hard to believe that Congress would ensure a recession by letting all the Bush tax cuts expire. I still think a deal gets struck in January.

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