I’m not particularly worried about the budget deficit. In fact, of all the major problems the U.S. faces, I’m least worried about the deficit.
That’s not because we don’t have to get the problem under control; it’s because I’m pretty sure we will. Why? The budget deficit is unique: If Congress is unable to agree on a remedy, the problem goes away on its own. Would that all of our challenges were so cooperative.
Federal Reserve Chairman Ben S. Bernanke calls the end of 2012 “a fiscal cliff.” The Bush tax cuts are set to expire. The $1.2 trillion spending sequester, enforcing cuts in the defense and domestic budgets, is set to go off. Various stimulus measures — including the payroll tax cut — are scheduled to end. “Taken together,” writes the Committee for a Responsible Federal Budget, “these policies would reduce ten-year deficits by over $6.8 trillion relative to realistic current policy projections — enough to put the debt on a sharp downward path.”
In fact, if Congress gridlocks — and what does Congress do these days but gridlock? — we face the prospect of too much deficit reduction too fast. The Congressional Budget Office estimates that barreling over the fiscal cliff would increase unemployment by 1.1 percent in 2013.
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via Why I don’t stress about deficits – The Washington Post.