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Does Obama's Tax Policy Make Sense?

The New York Times editorial page says so:

Mr. Obama’s efforts to enact a reasonable tax policy are not just good politics. They make good sense.

I half agree. The politics are clear. People like the middle class tax cuts and hate the tax cuts for the rich. The Republican game plan is to attach the two together, so that any opponent of tax cuts for the rich can be depicted as a middle-class tax hiker. Democrats have shrewdly reponded by detaching the two.

Now, as policy, this is a clear improvement over the Republican position. Compared with the GOP, the Democrats have a more progressive and more fiscally responsible tax policy. But does it actually make sense? No, it doesn't. Even the middle-class tax cuts are unaffordable:

I don't blame the Democrats here. Unilateral fiscal responsibility is extremely difficult. If the opposition is committed to attacking any measure you propose to reduce the deficit, as the Republicans are, you have to pick your targets carefully. Otherwise you'll just lose and allow the opposition to impose even less responsible fiscal policy. Given the political constraints, the Democrats are making impressive progress on reducing the long-term deficit. But those constraints make sufficient progress impossible. Their policy may be the best you could expect, but it still isn't good.