Jobs Report Proves Fiscal Cliff Deal a Farce

Let’s say I gave you three pieces of information about the U.S. economy. First, we have a terrible unemployment problem that’s not solving itself anytime soon. Second, we’re running big deficits that we expect will become unsustainable in the coming years, though there’s no evidence that the market is even mildly concerned about them right now. Third, we can borrow for next to nothing because the world sees us as a rare safe harbor during a time of global economic turmoil. What sort of economic policy would you design?