Washington Post Continues Deficit Reduction Jihad

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Sunday, 23 December 2012 09:22

The Washington Post continued its practice of ignoring journalistic standards in trying to push its line on the necessity of a budget deal. An article referred to the end of the year deadline before higher tax rates and spending cuts kick in, then told readers:

"That deadline, now called the fiscal cliff, is widely believed capable of causing another recession."

It's actually not clear that any economists think that missing the deadline will cause the economy to fall into a recession. The Congressional Budget Office and others have projected that if higher tax rates and the legislated spending cuts stay in effect all year that the economy might fall into another recession. However, they did not project that a recession would result if we went a week or two into 2013 without a deal, especially if any tax cuts put in place were made retroactive, which would almost certainly be the case.