Trepidations

Mark Thoma has summarized the positions of four economists with regard to the deal Obama has worked out with the Senate.  None of the economists thinks we have done the right thing; they all hope that the House votes the deal down.

Brad DeLong thinks that little has been done to avoid the effects of austerity; the necessary fiscal stimulus is just not there.  Paul Krugman worries that Obama's negotiations in the current situation do not augur well for the fight coming down the pike:

So why the bad taste in progressives’ mouths? It has less to do with where Obama ended up than with how he got there. He kept drawing lines in the sand, then erasing them and retreating to a new position. And his evident desire to have a deal before hitting the essentially innocuous fiscal cliff bodes very badly for the confrontation looming in a few weeks over the debt ceiling.

 Jeffrey Sachs echoes Krugman and DeLong:

The White House should have put forward its own tax plan with adequate overall revenues. It could have told Congress to adopt the alternative plan or simply accept the expiration of the Bush tax cuts. That was the time for negotiating leverage. Instead, the White House gave up the revenues permanently and without a fight.

 Greg Mankiw, the only conservative discussed, is complaining that the deal did not follow the Simpson-Bowles approach and lower social insurance costs.

The deal appears to offer no entitlement reforms, no tax reform, and higher marginal tax rates.

The year is not starting out well.  Obama has yet to act as those who voted for him want him to act.  He has not learned anything in the past four years.