I came across this fascinating article on the fiscal cliff negotiations. Here is the key chart:
To explain what happened, consider the total deal amount of each offer:
Before Boehnor decided to abandon negotiations, the two sides were basically looking at roughly the same aggregate deficit reduction number.
What about the composition?
Well, Obama and Boehnor were basically within about $200B on nearly every item by 12/18/12. That's basically within roughly 20% of Boehnor's numbers.
What did they finally land up with? Well, roughly $650B in tax increases and north of $100B in interest savings. Hmmm ... to think they could have agreed to stabilize debt completely and were that close and then walked away!
If you consider that the GOP walked away from a $4.5T deal the first round and a $2.6T deal this round all to protect taxes, only to see tax hikes with nearly no spending cuts, you have to wonder whether the GOP purists have any idea how damaging their all or nothing approach is to their objectives.
Perhaps the next round of brinkmanship will prove me wrong, but as of now, it does seem like the GOP has walked away from some really sweet deals.
To explain what happened, consider the total deal amount of each offer:
Before Boehnor decided to abandon negotiations, the two sides were basically looking at roughly the same aggregate deficit reduction number.
What about the composition?
Well, Obama and Boehnor were basically within about $200B on nearly every item by 12/18/12. That's basically within roughly 20% of Boehnor's numbers.
What did they finally land up with? Well, roughly $650B in tax increases and north of $100B in interest savings. Hmmm ... to think they could have agreed to stabilize debt completely and were that close and then walked away!
If you consider that the GOP walked away from a $4.5T deal the first round and a $2.6T deal this round all to protect taxes, only to see tax hikes with nearly no spending cuts, you have to wonder whether the GOP purists have any idea how damaging their all or nothing approach is to their objectives.
Perhaps the next round of brinkmanship will prove me wrong, but as of now, it does seem like the GOP has walked away from some really sweet deals.
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