A recent article in the Huffington Post discusses the economic benefits to Gridlock, as perceived by banking giant, Goldman Sachs. The article outlines the arguments made in a recent Goldman research note.
The economists explain that a divided government is the only way that our government wouldn’t experience a sudden “belt-tightening” at the end of 2012. They conclude that a Democrat-dominated government would let the Bush Tax Cuts expire, which would have severe economic consequences. They also conclude that a Republican-dominated government would let stimulus funds expire, which would also be detrimental to our economy. By retaining a divided government, Congress is more likely to slowly “phase out” both programs through compromise, which would lessen the risk of any sudden drops in stimulus funds or tax cuts.
This argument is an interesting one, because most discussions of Gridlock only mention the negative consequences of the perceived inaction. But according to the Goldman perspective, both parties’ platforms could be harmful to the economy, and our nation would receive the most benefits with a compromise, rather than with smooth passing of legislation from one party.