Miracles Can Happen, But Probably Won't

Antonio Fatas reacts to the Republican counterproposal on the budget:

Planning for (fiscal) miracles, by Antonio Fatas: The debate in the US about how to deal with the "fiscal cliff" has produced a counterproposal by the Republicans on how to avert a crisis. The proposal is criticized by many because of its lack of details (see here, here, here and here). The way the proposal avoids dealing with the real issues and suggests solutions that do not impose a cost on anyone reminds me of some of the debates in Europe about finding a plan to deal with Greek government debt or the capitalization of Spanish banks. In all these cases you hear proposals that seem to generate resources without anyone having to pay for them. Republicans in the US want to raise revenues without increasing tax rates, cutting spending without really cutting it. And the Spanish government will bailout banks without imposing any cost on taxpayers. In some cases these proposal have no logic in others there is some logic but a lot of wishful thinking that generates economic miracles. ...