The country is running massive deficits. Combined tax increases and spending cuts is exactly what we need to put our house in order.
The idea that this bitter medicine would be ruinous is based on outmoded Keynesian thinking which no longer applies to a value-transference-based economy. If people have less money to spend, then they buy less crap manufactured in China. Chinese people lose jobs, not Americans. Our current high unemployment rate is based on the fact that we just don’t need the labor of those unemployed in order to produce all of the crap we consume. Labor-saving technology + free trade + corporations who only care about profits = not enough desirable jobs for everyone who wants one. (However, the true problem is not a lack of jobs, but a lack of vision about how to organize society around a 21st century economy with 21st century technology.)
I doubt that we will ever get to find out if I am right that economy would not be that hard hit by the “cliff.” Our Congress is always good at coming to some bipartisan agreement which results in even more deficit spending.
I prefer the Obama plan for only letting tax cuts expire for taxpayers with incomes above $250K (who mostly transfer value rather than create it), but I predict that Republicans, who shamelessly pander to the rich (who don’t even return the favor with votes), won’t let that happen. Thus I predict that Democrats and Republicans will come to an agreement in which Democrats will let Republicans continue to give tax breaks to the richest Americans, and Republicans will let Democrats spend more money.