Endless cable news coverage of what became known as the "fiscal cliff crisis" did little to illuminate the realities of US economic policy, but everything to stoke fear, misinform, and give national platforms for people like Grover Norquist.
To appreciate how the kabuki theater works, consider three big outcomes of the fiscal cliff legislation that the attendant reality TV show never highlighted:
1. Bush defeats Clinton: President Clinton’s tax rates delivered big budget surpluses and one of history’s strongest rates of economic growth. By contrast, President Bush’s cuts to those tax rates birthed massive deficits and the slowest rate of economic growth in modern history. Yet, faced with the fiscal cliff’s choice between Clinton and Bush tax rates, both parties agreed to ratify almost all of the latter.
2. Nobody in Washington cares about deficits: During December’s “fiscal cliff” TV show, D.C.‘s reality stars told us that they were focused on reducing the budget deficit. But, according to the Congressional Budget Office, the final bill will increase the budget deficit by $4 trillion.
3. Corporate welfare is sacrosanct: For all the effort to make wasteful spending the villain in the “fiscal cliff” TV show, Congress ultimately refused to touch that spending. Somehow, defense contractor largesse in the bloated Pentagon budget was off the table. Somehow, subsidies to corporate agribusiness were separated from the negotiations and then extended. Meanwhile, as the Roosevelt Institution’s Matt Stoller documented, the final “fiscal cliff” bill included taxpayer handouts for everything from NASCAR racetracks, to Hollywood studios, to a new Goldman Sachs headquarters.