Spending Cuts and Politicians: Same Story, Different Chapter

In and of itself, political dysfunction is frustrating. The negative economic impact of indecision and awkward last-minute fiscal policy patches has become so great that serious economists are spending a tremendous amount of time studying the phenomenon. Years from now, while the U.S. is still dealing with the sequester, students will be listening to lectures about the direct and material economic cost of the eleventh-hour New Year’s tax agreement.

Like many politicians and market participants, Senate GOP Leader Mitch McConnell, a Republican from Kentucky, recognized the negative impact of delaying a decision to the last minute, and he has urged action. Unfortunately, he doesn’t think that the Democratic proposal — the only one currently on the table, besides the sequestration itself — is feasible.

“Their whole goal here isn’t to solve the problem, it’s to have a show vote that’s designed to fail, call it a day, and wait for someone else to pick up the pieces,” he told reporters on Thursday. ”Well, my message this morning is simple: There won’t be any easy off-ramps on this one. The days of 11th hour negotiations are over. Washington Democrats may have gotten used to Republicans bailing them out of their own lack of responsibility. But those days have passed.”

Democrats, of course, disagree.