Relative to what might have been, one shouldn’t be too depressed about the fiscal cliff deal.  There are no cuts to the country’s most successful anti-poverty program, Social Security, and no rise in the Medicare eligibility age.  Relative to the basic macroeconomic logic of the situation, however, the fiscal cliff deal is a policy mistake.

Contrary to a wildly successful marketing campaign, the fiscal cliff was a crisis of too much austerity.  The deal approved by the House last night either cancels or delays for two months much of the austerity that was planned for 2013, but in the end we are still left with austerity-lite.

If you insist on looking at it from the old “current law” baseline (which is to say, the law as it would have been if we had “gone over” the cliff), this deal expanded the deficit by some $4 trillion.  However, from the perspective of the baseline that matters for economic growth and employment, fiscal policy in 2013 will be more contractionary than it was in 2012.  Some already-existing measures like the expanded unemployment insurance benefits and a number of tax credits benefiting those with low incomes will continue, but there is no new stimulus in this deal; no infrastructure investment; no move to shore up public payrolls.  And relative to 2012, the government will be sucking even more demand out of the economy in 2013.  The most significant item in this respect is that the payroll tax holiday is set to expire, raising the rate on the employee side from 4.2 to 6.2 percent, meaning substantially reduced purchasing power this year for those who earn less than $110,000 (incomes above that level are not subject to the payroll tax).  Given the still-high unemployment rate—and the fact that this budget constraint is purely self-inflicted—this should be considered a big policy failure.

And this is only the beginning.  At some point, issues other than the budget deficit will be permitted to occupy the policy stage—but not just yet.  The across-the-board “sequester” spending cuts have merely been delayed for two months.  Moreover, the debt ceiling standoff has already begun, and in all likelihood it will produce a deal that leads to an even larger dose of austerity (the executive branch is insisting they will not negotiate over raising the debt limit, but congressional Republicans, quite reasonably, are assuming that the administration will blink first).