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n broad terms, the fiscal cliff deal was peanuts. The sequestration negotiations will probably turn into peanuts too. The plain fact is that although both sides talk a good game, Democrats are afraid to raise taxes very much and Republicans are afraid to cut entitlements very much. That's why Dems won't even consider things like carbon taxes or financial transaction taxes, and why Republicans generally refuse to offer concrete entitlement cuts. Even Paul Ryan's famous budget punts on Social Security completely, doesn't touch Medicare in the medium term, and does its level best to painstakingly obscure the fact that it would cut Medicare in the long term.

The next few years are going to be trench warfare. No one is likely to win or lose in any big way.

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