Maynard at Creative Destruction has the optimist’s take on the reported tax cut deal:
[T]he deal supposedly struck between Obama and the Republicans is not too bad and better than was to be expected. We give the rich about $60 billion a year, and in return get about as much economic stimulus, focused on low- and moderate-income people, as we could hope to get.
I observe that the Republican positions include permanent extension of all Bush tax cuts, permanent repeal of the estate tax, and no (or no net stimulus from) UI benefits. So I tend to agree. The best policy and politics would have been to allow the Bush tax cuts to expire and force their replacement with something that was less damaging to the government’s long-term finances, but as long as I’m dreaming I might as well ask for a pony.
What would solidify my position would be news of associated side deals for (a) a suitable increase in the debt limit, since it’s clear that deficits really don’t matter (certainly in the near term), (b) no government shutdown in the next Congress, and/or (c) no fair doom-mongering any cashflow shortfall for Social Security due to the payroll tax holiday. Did I mention that pony?