Adding all of that up—and understanding that the payroll tax holiday more closely resembles economically impotent stimulus spending—kicking the can down the road comes at a steep fiscal cost. Now, I’m not in favor of going back to the Clinton tax rates. I believe that we should keep tax rates where they are, and reduce spending to get rid of our budget deficit. But President Obama has promised to veto any bill that does so. So what should responsible politicians do?
Remember that continuing to spend money we don’t have isn’t free. Deficit spending is a tax increase on our children and our grandchildren, and on people who have done the responsible thing and built up their savings. Going over the cliff means that the accounting gimmicks are over. No more “temporary” this and “temporary” that, so that Congress can pretend to be more fiscally responsible than it’s actually being. Going over the cliff means that a broad swath of Americans will be required to pay for the enlarged government that they voted for in November. I don’t think that’s such a bad thing.