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Home Publications Blogs Beat the Press "Careen Off the So-Called Fiscal Cliff" It's Silly Season at the NYT

"Careen Off the So-Called Fiscal Cliff" It's Silly Season at the NYT

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Thursday, 20 December 2012 20:40

Ever since the election the Wall Street gang has been trying to build up scare stories around the budget standoff between the President and the Republican House. The term "fiscal cliff" is a central part of this campaign since it implies that something ominous happens if there is no deal by the end of the year.

As every economist and budget analyst knows, it makes virtually no difference whatsoever if there is a deal 10 days before the end of the year or 10 days after. However if the Wall Street gang can build up enough fear then it will lead to more pressure to get a deal before the end of the year. Since President Obama will be on much better negotiating turf after the end of the year and the tax cuts have already expired, a deal struck this year will likely be more favorable to the Republicans.

The NYT seems to have joined in this effort, telling readers that we may "careen off the so-called fiscal cliff" if there is no deal. This sort of silly and inaccurate metaphor is best left for fiction. It has no place in a serious newspaper.

Comments (7)Add Comment
RIP Balanced Budget Amendment?
written by wkj, December 21, 2012 9:08
One possible upside of all of this fiscal cliff frenzy is that the next time there is a push for a balanced budget amendment (Depend on it, nothing that bad ever dies.) sensible people can point out that the BBA would be "worse than the fiscal cliff would have been".
...
written by bmz, December 21, 2012 9:23
"it makes virtually no difference whatsoever if there is a deal 10 days before the end of the year or 10 days after."
It does for tax planning.
What's a bad metaphor?
written by David, December 21, 2012 9:26
Why not hurtle a virgin sacrifice off the cliff? Or better yet, the editor who let it print?

So-called journalists adopting and developing the rhetoric of the right? Sad.


With grace ...
written by David, December 21, 2012 10:32
written by bmz, December 21, 2012 9:23
"it makes virtually no difference whatsoever if there is a deal 10 days before the end of the year or 10 days after."
It does for tax planning.


Nope. That's what grace periods are for, i.e. when the rules are decided upon next month, Congress will be sure to allow people to make their modifications as they would have if the GOP weren't populated by Chicken Littles, and the Dems didn't have Lucy Gooseys like Erskine Bowles drinking the Kool-Aid too.
"It has no place in a serious newspaper."
written by John Q, December 21, 2012 3:10
When it comes to reporting on the economy, is there such a thing?
The media has taken the fiscal cliff metaphor back to "Rebel without a cause"
written by John Wright, December 21, 2012 10:08
I wondered if anyone in the media had invoked the "chicken" game of the cars over the cliff scene in "Rebel Without a Cause" with James Dean.

And google produced:

http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/21/what-negotiation-theory-can-teach-us-about-the-fiscal-cliff-talks/

And it DOES mention the movie's cars over cliff scene regarding the fiscal cliff.

This WAPO article asserts that going over the fiscal cliff is "actually good for no one" with the suggestion that the Republicans will refuse to raise the debt ceiling if Obama waits until February.

Of course, this assumes Obama doesn't use Ron Paul's suggestion that the Federal Reserve simply agree to destroy some of its Treasury security holdings to effectively give more debt ceiling room.

This action lowers the indebtedness of the federal government as the treasury securities simply disappear from the liability side of the Federal government's books.

If Obama were willing to use this method to achieve more debt ceiling room, people could see Obama has ALL the cards in the negotiation with the Republicans.

But I expect Obama, in fealty to the American upper crust, will cave to the Republicans before Jan 22 and stress to the American people that he did the best anyone could.






What about government contract jobs?
written by Charles Peterson, December 21, 2012 10:33
A friend of mine works under a government contract which expires on December 31. Normally, she could expect the contract to be renewed routinely. But if the fiscal dip takes place on Jan 1, would it be likely she might face a few weeks before the contract is renewed?

BTW, regardless, I think she'd rather see that than any kind of cut to Social Security, since that will be all the retirement income she will have in a few years.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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