Game Theory Foils a Balanced Budget Compromise? ( #deficit #austerity #taxes #gametheory )

From Arnold Kling (paraphrasing Eugene Steuerle):
Democrats think that if they agree to spending cuts to reduce the deficit, then Republicans will take advantage of that by passing tax cuts. Meanwhile, Republicans think that if they agree to tax increases to reduce the deficit, then Democrats will take advantage of that by raising spending. The equilibrium strategy is for neither party to compromise on deficit reduction.