"The tax increases sound scarier. But we have a trillion dollar deficit!" Roberts pointed out. "So to me, the idea of raising taxes is probably a good idea. It says this spending that we've been doing is not a free lunch."
I'm not convinced that giving politicians more money is ever a good idea.
And won't the wealthy high-earners find a way around the higher rates? When rich people do that, much of their money goes to lawyers instead of consumer satisfaction.
The other thing that scares Washington are the automatic cuts to Pentagon spending. "These draconian cuts represent a threat to our national security," say Republican Sens. John McCain of Arizona and Lindsey Graham of South Carolina.
"The Pentagon is hysterical about it," notes Ben Friedman of the Cato Institute. "But it's about 10 percent, which would bring us roughly back to where we were in defense spending in 2006 ... adjusted for inflation, not exactly a crisis year in the Pentagon. They've gotten very spoiled at the Pentagon. They had years of luxury."
Automatic cuts might even be good, said Friedman.
"We need probably bigger cuts in the defense budget because we do too much. This will force us to make some choices. We try to be everything in the world ... pretending that every unstable country is a threat to us."
I won't lose sleep over automatic spending cuts. The "fiscal cliff" frightens me less than the bankruptcy cliff.
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