The sequester really was a good idea

Here is the latest:

House and Senate negotiators were putting the finishing touches Sunday on what would be the first successful budget accord since 2011, when the battle over a soaring national debt first paralyzed Washington.

I have not seen enough detail to judge this emerging deal, but it seems it will reverse some of the initial cuts to discretionary spending from the sequester.  You will recall my original take on the sequester, namely that it brought some much needed spending reductions (relative to baseline, they are mostly not actual spending reductions!), and that undesirable side effects could be handled by a subsequent Coasian bargain between the parties.  (And here is me on the macro consequences of the sequester, and there was also plenty of monetary offset.)  That appears to be exactly what is in progress.  It is unlikely that bargain will approximate an ideal, but the pre-sequester spending decisions were not ideal either.


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