The cliff, an action-forcing mechanism, could cause a constructive chaos of questioning. Is it wise to increase taxes as student debt passes the $1 trillion mark, dampening graduates’ powers as consumers? Two-thirds of them have mini-mortgages (average debt, $27,000). Is it wise to increase the top tax rates, which are paid by small businesses with more than half of small-business income, just as the Obamacare tax (called a mandate until Chief Justice John Roberts’s clarification) produces many “49ers”? Those are businesses that stay below the 50-employee threshold for providing insurance or reduce full-time employees to part-timers. A defense sequester could raise questions about whom — Denmark? Poland? — our 54,000 troops in Germany are protecting Germans against.
Washington, with its (at most) one-track mind, is fixated on the “Bush tax rates” but cannot even accurately describe its monomania. It actually is the Bush-Obama rates. Two years ago, when the economy was, as now, sputtering along barely above stall speed, Obama — joined by 43 Senate and 139 House Democrats — extended the rates for two years because the economy was too weak to absorb large tax increases.