So here we are. We didn’t go over the “fiscal cliff.” And we came up with a not too bad punt on the debt limit thing. Should we be patting ourselves on the back? I guess that all depends on your perspective.
On one hand, we kept the economy from totally tanking again. On the other hand, we still have these issues to deal with because all we did was implement a strategy for postponing the real decisions.
The big problem with this kind of political/economic brinksmanship is that it makes everyone very nervous. And when people are nervous, it’s hard for them to feel comfortable about spending or investing. When people are nervous, they tend to step on purchases.
A while back, I expressed a hope that a more rational approach would be adopted by those who have been given the job of easing all of these economic woes. It would seem that, even if temporarily, this is turning out to be the case. Although when we hear of ideas like minting a one trillion dollar coin and using it to pay off a big chunk of the debt, one has to wonder.