As I have noted before, Paul Krugman has a very good track record of foreseeing the political implications of economic policy. The takeaway in his post today, on the tax deal, is that in December of 2011 …
The Democratic parts of the deal will be on the verge of expiring, while the Republican parts will have another year to run. Won’t that put the Dems in a desperate position? Won’t Obama be strongly tempted to make further big concessions to get something to boost the economy for another year?
Obama may be buying off the hostage-takers by … giving them more hostages.
The post is not overly wonkish. You really should read it. But then, it’s Krugman, and that is always true.
Just one suggestion Paul. Why don’t you call your next book Cassandranomics?