The R’s have proved to be impossible to negotiate with over this issue....
Basic game theory, well known to highly advanced academics and mobsters: when dealing with an intractable, unreliable opponent, the side with a) the most leverage, and b) the skills to use that leverage can win. The administration has such leverage in both the scheduled defense cuts and tax increases. Stand firm on both counts even if it means facing the fiscal cliff, for to cave is to walk a big step closer to permanence of the Bush tax cuts, to say bye-bye to new revs, to take defense spending off the table, and to say hello to even deeper cuts in discretionary programs to help the least advantaged.Read it at On the Economy
The Next Debt Ceiling Debate: Too Ugly to Write About
by Jared Bernstein