The commonplace saying “there are no atheists in foxholes” — while probably technically false — seems apt to describe the so-called “fiscal cliff” situation the United States government finds itself in. Deficit hawks and Austrian economics purists ought to be happy, as the automatic cuts produce the first significant deficit reduction in 12 years and reduce government involvement in the economy more substantially than essentially anything since Bretton Woods.
But, with important exceptions, most commentators agree that the fiscal cliff is likely to lead to major economic problems because of the withdrawal of substantial government money from key economic functions and of tax rates returned to those that existed during the last economic boom. Let’s recognize this for what it is: an admission that government’s involvement in the economy actually does create jobs, Mitt Romney notwithstanding.
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