With a Jewish holiday coming up tonight thoughts turn to what I should be neurotic about. Matt Yglesias says I should freak out about Europe, and he’s right. But that’s been the case for two years. And the powers that be over there are religiously opposed to the proper steps to take to end the crisis. In short, seen it! So what’s next?

Eduardo Porter has an excellent and important article on the relationship between tax rates and economic growth. Here’s a surprise, it’s nothing like conservatives want you to believe. He shows that much higher marginal tax rates on the wealth would not significantly harm economic growth. Other research suggests that the standard line that tax cuts always promote economic growth is also doubtful.

The Washington Post has a first draft of history on the debt negotiations last year. It tells us mostly what we already knew: the White House was ready to sign onto a document that increased the Medicare eligibility age and instituted chained CPI, cutting Social Security cost-of-living increases. In exchange would be $800 billion in new taxes, roughly the cost of letting most of the high-end Bush tax cuts expire. Harry Reid and Nancy Pelosi reluctantly agreed to try and sell this. That basic deal is still on the table and will be relevant again.

The one defense of President Obama I’ve found most annoying is the argument that Obama “only” had the largest Democratic majority in Congress in a generation for a short period, so it would be unreasonable to expect too much from him given Republican opposition. The argument ignores reconciliation, which previous administrations had relied on to get legislation through the Senate despite strong opposition from the other party.

Here we go again. Intransigence from Republicans basically kept us out of a grand bargain last year. Plenty of Democrats were willing to do it, the White House was more than willing to do it, and even John Boehner was willing to do it, at least on a conceptual level. But House Republicans wouldn’t betray [...]

In the aftermath of a horribly bruising debt limit deal and the Occupy movement, the focus in Washington shifted away from deficits and back to the economy, jobs and income inequality. But as a reminder that social movements must be constant and vigilant, one powerful Democrat, in association with a DC lobbying group, wants to bring us right back to that moment last year when everybody hated politicians.

The Obama administration officially released its budget for fiscal year 2013 yesterday. it’s basically a long, vaguely political document that is effectively meaningless, dead on arrival in Congress, another package of ideas destined to go nowhere. The reason isn’t just GOP obstructionism; the Democrats could have passed much of the Obama agenda when they had very large majorities in both houses, but they chose not to.

When you have the kind of power Grover Norquist has held — namely, decades of unquestioned dictatorial control over the Republican Party as its grand ayatollah of anti-tax orthodoxy — it’s easy for a wee bit of hubris to creep into your thinking. The result is the occasional burst of excessive honesty, as exemplified by [...]

I’ve noticed this tension among politicians for a while. On the one hand, they want to say that they favor a “simpler” tax code, and they like to talk about how many thousands of pages the tax code is, and how byzantine it is to understand, etc. At the same time, they boast about all the goodies they give out to this or that business or individual using the tax code, which of course only makes it more complex.

It’s worth mapping out what will be the biggest stories to chronicle in 2012, what I’ll be looking toward.