President Barack Obama and congressmen on both sides of the aisle expressed satisfaction that the fiscal cliff agreement keeps tax cuts in place for 98 percent of Americans, including the middle class.

But that’s nothing to celebrate, says Nouriel Roubini, chairman of Roubini Global Economics and a business school professor at New York University.

“Neither Democrats nor Republicans recognize that maintaining a basic welfare state, which is right and necessary in our age of globalization, rapid technological change and demographic pressure, implies higher taxes for the middle class as well as for the rich,” he writes in the Financial Times.

Editor's Note: An $87,500 Tax Loophole Discovered by Cherry Hill Accountant

“A deal that extends unsustainable tax cuts for 98 percent of Americans is therefore a pyrrhic victory for Mr. Obama.”

Financial markets reacted positively to the fiscal accord. And bond market vigilantes may stay quiet for some time, given the current positive backdrop for Treasurys, Roubini says. “But eventually, the vigilantes will wake up.”

Now that the fiscal cliff has been solved, Obama and Congress will have to bridge their differences on raising the $16.4 trillion debt ceiling by next month to avoid a government default.

“If Congress refuses to give the government the ability to pay these bills on time, the consequences for the entire global economy would be catastrophic — far worse than the impact of a fiscal cliff,” the president says.

Editor's Note: An $87,500 Tax Loophole Discovered by Cherry Hill Accountant