Jury is still out for me. I don’t trust Washington bipartisanship at all. It seems to make some back-ended cuts in the future, which can easily be reversed by a future congress, and opens up the possibility of a tax increase. The latter would not be good.
I completely reject the concern by Paul Krugman and others that reduced government spending may hurt the economy; indeed, it’s the very opposite of the truth. Government is destroying wealth and sucking up investment dollars through running large deficits. Until that gets under control, the economy and its growth will be anemic compared to yesteryear.
I also don’t fully understand the politics of this, i.e., who looks like a winner or a loser. Obama is widely seen to have caved, and I suppose his base is a little upset, but time will tell what this all portends. My guess: not much. It’s not a really draconian cut, in spite of the complaining, and, as such, it won’t avert the serious–as in order of magnitude bigger–crisis coming from entitlements down the road.