The "cliff" is a terrible, panic-inducing way to frame the problem. If Obama and Congress were somehow to suffer collective amnesia and forget to do anything at all to resolve the impasse, the impact on the economy would unfold gradually over the course of 2013. As Dean Baker writes in the Guardian, "the direct hit to the economy from missing the 1 January deadline is close to zero." (If Wall Street panics on January 2, they'll be panicking in response to the bad metaphor -- not in response to anything actually happening in reality.)
Paul Krugman argues that Democrats must not give in, once again, to Republican economic blackmail:
It’s not like the debt-ceiling confrontation, where terrible things might well have happened right away if the deadline had been missed. This time, nothing very bad will happen to the economy if agreement isn’t reached until a few weeks or even a few months into 2013. So there’s time to bargain.As for the "self-inflicted" part: who could have possibly foreseen that scheduling draconian sequestration cuts to pressure the Super Committee into achieving a Super Bipartisany Compromise would backfire? Oh, wait.
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