The policy merits of the budget deal struck between President Obama and the Tea Party – no other group seems to have exerted serious influence – aren’t terribly interesting. If you subscribe to the mainstream tenets of macroeconomic thought, it will have a small, negative effect on unemployment, partially offsetting the benefits of the tax cut deal agreed to last December. If you instead subscribe to the small but politically influential subset of right-wing dissidents who believe that the government should respond to a liquidity trap by decreasing its deficit,...
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