Allowing the nation to go over the fiscal cliff for a very short period of time will provide all the legitimate political benefits of such a policy dive–with few to none of the menacing losses that are looming at the bottom. We can readily fly off the cliff on January 1st and be back on the top by January 2nd, 2013–even earlier if you cannot wait that long.
The gains have often been outlined. Allowing the Bush tax cuts to be reversed would allow Obama to increase tax revenues and subsequently introduce new tax cuts. It thus gets the Republicans who promised not to raise taxes off the hook and allows all politicians to crow that they cut taxes while increasing revenues–pure magic. The math is simple: if allowing the Bush tax cuts to expire increases tax rates on average by 4.2 percent, and the new cuts amount to 2 percent–we still have the remaining 2.2 percent difference as new revenues.