Third and State

I'm back, and that is completely unrelated to the fact that the blog in my absence featured people with bad wigs.

On Sunday, The New York Times launched the series The United States of Subsidies, which details the tax breaks and credits given out by state and local governments to businesses. Below you will find a link to the opening story, today's entry on Texas and finally a link to Pennsylvania data.

• Louise Story, The New York Times — As Companies Seek Tax Deals, Governments Pay High Price
• Louise Story, The New York Times — Lines Blur as Texas Gives Industries a Bonanza
• The Pennsylvania Data

In the Allentown Morning Call, John Micek interviews Budget Secretary Charles Zogby about the potential impact of the fiscal cliff on Pennsylvania.

Now would probably be a good time to remind everyone of two things: 1) a deal will be reached, and 2) it is meaningless whether that deal is reached on December 31 or sometime in January.

Predictions that the fiscal cliff will push the economy into a recession assume no deal is ever reached! That will not happen (alternative history fans will appreciate this review of what that scenario would look like).

On the other hand, a deal could be reached that is bad for the economy. So far the President's opening proposal largely limits tax increases to very high-income households and includes an extension of unemployment insurance as well as new spending on infrastructure. At this point, I'm relatively optimistic that the final deal will not include spending cuts within the next year that may potentially slow the economy.

Also, this morning’s Radio Smart Talk on WITF will take up the issue.

• Radio Smart Talk — Fiscal cliff and PA waterways; housing