At least they’re indoors where it’s air-conditioned. The Atlantic Wire has an update on “The Urgent Need for a Debt Deal Before a Monday Market Panic“:
… President Obama called an urgent meeting Saturday morning at the White House, which ended without resolution less than an hour later, the New York Times reports. The meeting, as various sources have speculated, was probably not a happy one. […] __
Another Democratic aide told TPM that “Leaders discussed the urgency of finding a path forward this weekend and agreed that staffs would work together throughout the weekend.” White House press secretary Jay Carney likewise said in a statement, “The leaders agreed to return to Capitol Hill to talk to their members and discuss a way forward, and conversations will continue throughout the day.” And after the meeting, Boehner held a conference call with rank-and-file Republicans where he pledged to help avert a crisis in the Asian markets by making a statement within 24 hours about the status of raising the debt limit…
__
Still, the result is that not only will all sides be working through the weekends, they may not get a break all next week, either. NBC News Capitol Hill reporter Luke Russert indicated that, according to NBC News’ Shawna Thomas over Twitter: “Per GOP aide House plans to be in session for a week straight starting Monday. A Monday to Monday work week. The goal according to the aide is to pass a debt deal and gavel out on Monday evening August 1st.”
__
It looks like it will be a long week. According to TPM, “Boehner said he was hoping to forge a deal to wrangle between $3 trillion and $5 trilion in savings and would prefer to avoid falling back on the so-called ‘McConnell Plan’ that would hand over authority to raise the debt ceiling to the President with Congress able to disapprove only with a two-thirds majority vote.” The New York Times reports that Boehner said on Saturday that, “As I said last night, over this weekend Congress will forge a responsible path forward. House and Senate leaders will be working to find a bipartisan solution to significantly reduce Washington spending and preserve the full faith and credit of the United States.”
FWIW (and I’m heartened by it) there’s a report at TPM that Harry Reid stated, again, “I will not support any short-term agreement, and neither will President Obama nor Leader Pelosi… We seek an extension of the debt ceiling through at least the end of 2012. We will not send a message of uncertainty to the world.”
So, looks like the next Kabuki Smackdown Special will occur after the Sabbath-Day Gasbags bloviate, but before the Asian markets go into free-fall.
In the interim, what’s everyone doing on this summer Saturday evening?
fleeting expletive
I had intended to drop in on one of the previous threads, where Sen. Mark Pryor was mentioned, to note what was to me one of the best moments in Bill Maher’s “Religulous”: the look on Sen. Pryor’s face after he said “You don’t have to pass an intelligence test to be a US Senator.”
Priceless.
steviez314
If we’re lucky, the Sun will finish going supernova before the default.
fleeting expletive
That is, when he realized what he had just said.
moonbat
My unquestioned faith that the Wall Street types run Congress is starting to falter. These guys are just frackin’ nuts to let this drag out this long.
burnspbesq
Thanking God that Boehner walked before Obama had a chance to devote serious thought to caving on the individual mandate.
Also watching baseball and working on a business plan for a solo practice.
burnspbesq
@moonbat:
Really. Where is Lloyd Blankfein when his country needs him?
JPL
Earlier MSNBC.com had breaking news saying Boehner planned to have a deal within twenty-four hours.
IMO..Boehner will have the house pass a debt plan that will not pass in the Senate. He’s a coward and cannot stand up to his own caucus. When was the last time Boehner put country first. In fact has he ever?
moonbat
burnspbesq @7 Seriously. These assholes should come in handy for something occasionally, doncha think?
walt
The problem with the best-case scenario – a deal with a 85-15 spending to revenue split – is that it encourages the very criminality that midwifed it. The GOP will feel rewarded for taking procedures and using them to extort their ideological demands at the point of catastrophe. Obama, will self-vouch for his preemptive compromises that saved the nation from these nihilists. And social democracy will be chipped and whittled away to please our Galtian overlords.
I’m feeling churlish but I’d just as soon throw those geezers on their mobility scooters into the Randian dystopia they wish on the rest of us. Let ’em choke on their supposed “rugged individualism”. Yeah, I know you’d throw many more innocents into the pit as well. And Republicans know that. At some point we got to find a way to call their bluff. Our messaging sucks and our strategy (omnidirectional placation?) needs overhauling.
Yutsano
@moonbat:
I hope y’all enjoy my free labor if they don’t pull off something.
burnspbesq
If anybody needs a football fix, Calgary vs. Edmonton is on espn3.com.
Russalot
Boehner has the paint lapping at his feet in that corner Barack has guided him into and Mitch is behind him nudging him to step on the painted floor, sucks to be…
http://www.youtube.com/watch?v=IFVUe9QO62U
seems appropriate
gbear
I’ve been trying to work up the energy to go mow the lawn. Seems like every time I’m ready to get to it, a quick shower moves thru before I can get out to the garage. I should just take it as a sign that I’m supposed to lounge the day away.
quannlace
What am i doing. Sipping some sauvignon blanc and listening to Prairie Home Companion. This is the week when the show is on a cruise. And saying how they managed to miss the massive heat wave in the midwest. Lucky them.
****************
Funny how things can be so relative. Today it was 98 instead of yesterday’s 108. So it felt almost brisk!
burnspbesq
@moonbat:
Well, Viniar gave the money for a new basketball arena at my college (he was two years ahead of me, but I didn’t know him), but what has Goldman done for us lately?
Frapalinger
Here’s a preview of tomorrow morning’s mouse circus:
“There’s a possibility of a deal, but the Democrats…”
“If only the Democrats would…”
“The President needs to compromise…”
and not a word about a racist, right wing mass murderer.
There will also probably be a few Al-Gore-is-fat-jokes from the Flying WASP on this Weak.
General Stuck
It’s all fucked up, because republicans think god has crawled in their ear and set up a profitable corporation.
So everything they do is blessed because they are doing it. I am pleased and proud of all our dem leaders during this nonsense. Pelosi, Reid , and Obama. For playing some mean politicking on the wingers, and sticking to their guns, on the things that matter most.
Don’t know what will be the end game, but I would guess that Mcconnell follows Norquist’s advice, and cuts a deal with maybe some spending cuts, nonessential ones, and raise the debt limit till past the election. Then it is up to the asylum that is the House of Reps., where even baby jeevus is in the dark how that will turn out.
moonbat
Other than wondering whether we are doomed by a bunch of rightwing nihilists I did manage to vacuum and shampoo the carpets. So if catastrophe comes, I won’t face it with dog pee stains on the floor.
stuckinred
Nothing was ever going to happen until the last minute, ya’ll know that.
jeffreyw
Mrs J, finally conceding that the big garden will not be producing tomatoes, bought enough at the farmer’s market today to make a few pints of awesome sauce. I have four pints in the water bath at the moment, the sauce has been simmering down half the day.
Nicole
My brother, a resident of Tennessee, told me that his fairly frequent attempts to reach out to his Senators to express his wish for them to be more amenable to negotiations over the debt ceiling resulted in them both unfriending him on Facebook. Way to handle your constituents there, dudes…
LosGatosCA
The IQ scale in America apparently goes from 25 (TeaTard) to 40 (magical tax cuts balance budgets) then to 50 (Republicans can be bargained with) moves to 60 (austerity in a liquidity trap just might work) and tops out at 75 (the average voter who thinks any of these people have the country’s interest at heart.
burnspbesq
@stuckinred:
Are you going to any of the shows celebrating the reopening of the Georgia Theater? I’m kinda anticipating that Drive-By Truckers will do a show for the ages.
stuckinred
jeffreyw
Nice. Our market finally had butter beans today so the princess is ecstatic!
boss bitch
@burnspbesq:
Why in the world would you even think this when his DOJ is fighting and mostly winning this battle in the courts?
burnspbesq
Listening to a perfectly lovely album of duets between the late Cape Breton fiddler Jerry Holland and ex-Solas guitarist John Doyle, called “Helping Hands.” It’s the last thing Holland recorded before he died in 2009. If this kind of music is your thing, and you don’t have this record, you owe it to yourself.
jl
Cataloging my non hybrid seeds, and bags of dried peas and lentils. Deciding whether I want my next order of gold to be little bars or tiny coins. Figuring how much gold dust I will need for small change. What kind of portable armory my out of state relatives who live in a gun freedom state should bring in their trunk next time they visit.
What will post apocalyptic ethics permit? Say, I mix some chocolate gold coins in with the real ones ‘by mistake’ for a bulk payment for, say, some underground bunker kit. In the new world a comming, would that be fraud, or just unethical sharp dealing, or the blessings of our New Freedom (for me, if not for thee).
So, ain’t doing nothing much. Just some weekend organizing type stuff around the house.
boss bitch
Didn’t Boehner already tank this deal? And then another and another? what the fuck is this guy doing?
burnspbesq
@boss bitch:
Getting paranoid, I guess, although it’s not paranoia when they really are after you.
ETA: It only takes two wacked-out Court of Appeals judges to create a circuit split. I’m pretty confident that the Supremes won’t blow up 187 years of Commerce Clause precedent, but I’d rather not test my hypothesis if it’s all the same to you.
jl
@30 Lying his ass off.
Corner Stone
Even though it’s hot as the blazing edge of boss bitch’s righteousness here, I’m making butterflied chicken breasts over roasted vegetables. It’s going to be epic.
And I picked up a bee-ay-you-tee-ful porterhouse tonight for under $8. I’m going to dry cure it over night in a dry rub and then grill it tomorrow.
Mr Stagger Lee
Frankly more Americans are waiting for the players in the NFL to vote on the new contract. The world can burn, but as long Green Bay plays New Orleans opening season who cares, and BTW go get me my beer!
MonkeyBoy
I stocked up on supplies on Friday and am able to spend the entire weekend NAKED as my solution to the heat/humidity problem.
Cliff in NH
Whats up ..
Walking the dog, eating blueberries, enjoying the weather:
http://mollymaesden.blogspot.com/2011/07/more-blueberries.html
making a pizza for dinner:
http://www.flickr.com/photos/64725711@N07/sets/72157627175778700/
then cleaning and drinking a beer =)
Canuckistani Tom
All the Atlas Shrugged/LOTR jokes recently made me realize that it’s been a while since I watched Peter Jackson’s movies. So I’m listening to the cast commentary on ROTK.
Now I’m going to hijack this thread by asking a question to all the other folks who live north of the border: If the country that buys 75% of our exports defaults, what the eff happens to us?
Davis X. Machina
Interesting. From Michael Cohen, a former Bill Richardson and Chris Dodd speechwriter. There’s no link to the original I can find, so this link is to Mark Kleiman’s place, where he quotes more of it:
More or less what I keep thinking.
JPL
boss bitch .. trying to avoid taking the blame for the market tanking.
jl
@38 Canuckistan
I for one promise to pay for anything you willing to sell me with genuine gold coins. Bags of them suckers.
pika
Yeah, between the loveliness of human beings writing art about Oslo and Amy Winehouse and Obama (often in the same post and tweet), I am drinking sauvignon blonk (my choots-pah) and hoping one of my dogs comes out of vet emerg. alive after another bout of hemorrhagic gastroenteritis. HGE. Not pretty, but we’ve got hopey changey stuff going on over here. Plus, it might be 80 in rachacha tomorrow, so hopey changey again.
The Dangerman
Fuck him; this is just Hostage Taking, too (“Give me what I want or Tokyo gets it”). If the Asian markets tank on Monday, maybe the point can get made that you don’t dick with the debt ceiling.
Cliff
President Obama called an urgent meeting Saturday morning at the White House, which ended without resolution less than an hour later
Boy, I sure didn’t see that one coming.
jeffreyw
@Canuckistani Tom: I expect the Canadian Government is thinking hard about picking up a few bargains via a Sheriff’s sale or two.
Alwhite
I hope I have enough ammo stored up but I am afraid I may not. May have to make a trip to the gun store, hope they are open on Sunday.
Yutsano
@The Dangerman: I wonder if the Chinese are going to give us another lecture about how we spend our money so we don’t fuck up their own economic boom. Dirty little secret: they still peg the renminbi to the dollar and not the euro.
Martin
@burnspbesq:
Well, there were 3 things in there I think were all inter-related:
1) eliminating the mandate
2) raising Medicare age eligibility
3) $400B in additional revenues.
Medicare savings should start slowly rolling in after 2015 because of the mandate so there will be real deficit benefits by keeping the mandate, and if that age starts getting kicked back, then it’s going to cost *more*, not less (though not until after the deficit window we’re talking about). And I think that’s where Obama said ‘If you want the mandate gone and a higher eligibility, this is what it’s going to cost to get it’.
The GOP has been acting as though there’s no government cost or savings to the mandate, but that’s not true. The mandate and other parts of PPACA are baked into the current deficit baseline, so if you yank one part out, the baseline moves and that move will need to be compensated for if you want $xT in deficit reduction off of the baseline. The cost of eliminating the mandate is pretty high relative to the baseline, and could be as high as $400B. Boehner didn’t want to pay for what his caucus demanded.
Honestly, the biggest problem I see in this debate is that the GOP has ideological goals about mechanisms here, and Obama generally doesn’t. I don’t think he gives a shit about the mandate, or even about the Medicare age so long as individuals and the government end up in the same or a better place. I think to him extending the medicare age to 67 would be fine so long as the mandate is there and there’s enough money in the budget to provide subsidies to the people that need it. But that winds up costing more money than keeping the age at 65. I believe his ideological goal is the end result, not the mechanism – which is why he didn’t fight that hard for any specific path on PPACA – just that it achieve certain goals, and what was passed mostly meets those goals.
hamletta
Harry Reid’s kicking butt:
burnspbesq
@Canuckistani Tom:
Not very much, I don’t think. It’s only the Federal Government defaulting, and it doesn’t buy a ton of Canadian goods or services. If interest rates go up across the board, that will have an adverse effect on private-sector demand, but I have no fucking clue about how to quantify the effect.
opie_jeanne
Watching the Angels lose to the Orioles. Contemplating some steak tacos from Ooba’s for supper.
El Cid
Interesting.
General Stuck
Yeah, me too. On the one hand, I am certain Obama and his advisors know full well to demand tax hikes from republicans would be like asking that they chew their own legs off, but on the other hand, he sure looks serious and disappointed the wingnuts didn’t go for it. I can only conclude, he should maybe take up acting when he finishes this POTUS gig.
Cliff in NH
@efgoldman:
Well, cleaning brewing equipment will count, also drinking beer to ‘help’ clean the house =)
Corner Stone
@Alwhite:
There is one, and only one, answer to the question:
“How much ammo do you have?”
“Not enough.”
Taylor
@39 Davis X. Machina
One interpretation is that Boner is being played.
Another interpretation is that we are being played.
Was Obama’s anger on Friday part of the act?
Or was he genuinely pissed that they were walking away from SS and Medicare cuts?
Cuts that he’s been talking up for the last 3 years.
Suppose the GOP takes the cuts.
What have we won?
The Dangerman
@Yutsano:
I don’t know what’s gonna get fucked up or where, but, one thing I’m fairly sure of is things will have to start going to shit someplace prior to a deal getting done; as I posted yesterday, I hope the smart people can well navigate the minefield being placed by some seriously stupid fuckers.
lamh34
Damn, Debt Ceiling talks “breakdown”, Crazy Right-Winger kills close to 100 in Norway, Amy Winehous dies and now I”m reading that a bullet train derailed in China killing passengers on board. With all the bad news, here’s a little story that may make you smile, it made me smile for sure.
I sure hope this kids gets to meet FLOTUS.
12 Year Old Wants to Designs First Lady’s Gown
Corner Stone
At times like these I wonder what we can learn from Tiger Woods firing “Straight Thuggin” Stevie Williams.
Davis X. Machina
@Taylor: Suppose they don’t? Cohen’s theory is a.) parsimonious and b.) explains the phenomena.
That’s usually a good combination.
Yutsano
@burnspbesq:
Except oil. Which we get more of from Canada than any other country. If we default the price of oil will crash like a badly made Airbus A380. And the Canadian economy goes kablooey. Not even a sudden maple syrup craze in Japan will fix that.
lamh34
I was really pissed earlier today. Damn FEDEX claimed they attempted to deliver a package I was waiting for at 10:22, but I had been sitting in my damn living room since 8am and no one came to my damn door to deliver anything. Hell, I went to the bathroom maybe once, but even if they came during that time, I didn’t even have a door notice saying they had attempted to deliver. Also, I live in an apartment complex, and the office is open on Saturday. They open by 10am and if a package was delivered to the office, mgmt would have called. Now I gotta wait until Mon and I’ve got to go out of my way to pick-up the package after work. What’s the point of paying extra if FEDEX is gonna lie about even try to deliver.
F*k u FedEx!
Corner Stone
Damn Kthug lighting it up:
What Obama Was Willing to Give Away
hamletta
lamh34, what a great story! Neat kid; and great that his family is so supportive.
jl
@49 I do not see how they were even close to a deal even before Boehner pulled his kind of lame, and so far failed, PR stunt.
As far as I can tell the House Democrats did cave, betray human decency, become non extremist, decided to cooperate, became statesmen (whatever you want to call it), when they agreed to some benefit cuts for Social Security and Medicare. But those concessions were mostly on more means testing, and then only for middle class and above. They were still saying hell no to things like increases in Medicare eligibility age.
I saw the Democratic new demand for the 13% of package being moved from cuts to revenue increases (I like putting it in percentage rather than dollar terms to give a better perspective on how far that demand ‘moved the goal posts’) as a demand they made as compensation for what they saw as a big concession on social insurance.
Obama’s call for increase in eligibility age for Medicare is only non disastrous politically and economically is if Obama can guarantee future 65 and 66 year olds that they will be taken care of through his health care reform. But I heard no talk about any adjustments to make up for the difference in cost (edit: to the 65 and 66ers), so it was still a big cut.
The GOP wanted mandates gone all of a sudden, probably to totally blow up any, even very remote, possibility of compromise on social insurance. This become an important GOP issue right after the House Democrats came up with some social insurance ‘adjustments’ they could live with. IMHO.
Anyone think that I got something wrong here?
Taylor
@62 Davis X. Machina
Cohen’s argument is the antithesis of parsimony.
To accept it, you have to believe that Obama’s talk about shared sacrifice, going back to 2008, his establishment of Simpson-Bowles (when Congress didn’t want to hear about), and his claim that we must have a Grand Bargain or nothing, are part of some grand strategy going back three years, to ambush the GOP. Did he know all along that they would retake the House?
But all of this grand strategy relies on the GOP being too lunatic to accept cuts bigger than Boner was bargaining for a few weeks ago.
If it were true, this would be Russian Roulette on an epic scale.
Rivers in Egypt.
trollhattan
@Canuckistani Tom:
We will send you all the Republicans you can eat. Also, too, Texas, Arizona and Utah.
You’re welcome.
nancydarling
I’m settling in to finish re-reading Truman Capote’s “The Grass Harp”. I’m about half way through. It was a sweeter, simpler time, in Truman’s mind at least. The villains weren’t all that villainous and the daft characters weren’t as tragic as Tennessee’s were.
I guess you could call it escapism.
The Dangerman
@jl:
No mandates blows up the ACA; insurance companies would have a shit fit of the highest order.
What does one serve with Republicans, white or red?
4tehlulz
Your economy collapses. Do you honestly think the Canadian financial system would be immune to the greatest financial panic in the history of capitalism?
Davis X. Machina
@The Dangerman:
Liberal outreach. Common-ground seeking. See, they can do it.
jurassicpork
I want to play a game. It’s called “Name! That! Loon!“
jl
@70, yes, thank you for bringing me to my senses. No mandate is way way bigger than just trying to blow up Medicare eligibility age issue.
My mistake is trying to make some kind of sense of the shenanigans, and it is clouding my judgment.
General Stuck
Even the entitlement program cuts had huge poison pills in them that the wingers would never go for, like medicare bargaining for lower drug prices.
Both sides, though all of it initiated by the wingnuts, have been slopping layers of bullshit in their dealings, when it boils down to both side wanted something specific, that was politically impossible to give. Wingers wanted the ACA blown up by blowing up the mandate, and Obama countered with tax increases on the wealthy.
The wingers thought they could roll Obama, and they didn’t. So we are left at the precipice of economic disaster, with no apparent way out, other than Obama declaring laws unconstitutional. Just peachy.
cat48
Another interpretation is that we are being played.
Was Obama’s anger on Friday part of the act?
Or was he genuinely pissed that they were walking away from SS and Medicare cuts?
Who IS Barack Hussein Obama?
jl
@58
“Another interpretation is that we are being played.”
Well, in the big scheme of things, you hit the bulls eye right there. We are being played. By whom and what whoever’s underpants gnome game is, is a little obscure.
The both hilarious and disgusting fact is that there is no current debt or deficit crisis now. There is a long run (as in 25 to 40 year run) long term debt crisis, but there is no reason to deal with it now, and there are good reasons not to start dealing with it until the recovery is stronger. At least, no reason that anyone can see from any economic statistics that we would tell us something about any problems created by current US debt and deficits.
So, there is no justification for all the nonsense. None. Zero. Zip. Nada. There is a political, legal, and possibly Constitutional crisis. But there is absolutely no economic justification for these deficit and debt talks.
In fact, from a Keynesian point of view it is worse than useless to deal with it now in the way that they are doing it. It is positively harmful to the extent that short term government spending cuts are included.
So, yeah, we are being played.
PreservedKillick
I really honest to deity think that the basic problem is that the wingers actually *believe* all the bullshit that the republican party has been spewing for the last 20 years.
So we have enough cash in tax receipts to run the government, there’s a ton of waste we can just eliminate and tax cuts will, in fact, juice the economy.
Everything is peachy, we won’t default, we’ll just lay off a bunch of paper pushers. The government doesn’t actually DO anything, right?
So you could imagine the Boehner is sitting them down, and basically saying, uh, guys, we gotta talk, about all that bullshit, see….
General Stuck
Deep Thought
Is it selling out, when the offer cannot be accepted?
SIA
Hahaha!
henqiguai
The Dangerman #70
White. Definitely, white.
Mike Kay (Democrat of the Century)
The suspense is killing people.
It’s already claimed Amy Winehouse.
hamletta
Zing!
cat48
Frankensteinbeck
I continue to not understand why anyone thinks Obama – who extended the social safety net more than anyone has since FDR and delivers lengthy speeches explaining its necessity and has passed up every single fabulous opportunity that’s been handed to him to gut it – wants to gut the safety net.
Amir_Khalid
I’m dubious about the prospects for a debt deal. The Republicans don’t want to do a deal, any deal, with him in the White House. Because they figure that
1. Obama is a Democrat, and therefore The Enemy. Thus any deal with him betrays the Cause, which is to frustrate his evil machinations and eventually cast him out from the (oval) office that is rightfully Newt Gingrich’s. Or Michele Bachmann’s.
2. Obama is a slick Chicago lawyer who outsmarts them time and again. With any terms he offers them, they’ll be trying to figure out exactly how they’re getting rolled this time. I reckon this is why they’ve been refusing a deal even on terms which they themselves originally proposed. (In other words, they’re afraid to do a deal with him.)
3. Looming global economic crisis? What is this delusion of which you speak?
I has a brainwave! Let’s have a Balloon Juice betting pool on the start date of the Global Crash of August 2011!
Yutsano
@Amir_Khalid:
Not to depress you, but you’re not immune from that shockwave just because you’re on the other side of the planet you know.
4tehlulz
@Amir_Khalid: Monday. We are at the TARP moment, but most of the House GOP learned the wrong lesson from 2008.
Amir_Khalid
@Yutsano:
(Sigh.) I knowz, I knowz. But you have this crazy bunch on your side of the planet that seriously believes it’s all just scare talk. :(
Dollared
I’m really confused. If the Republicans take the 85/15 deal,
-and Medicare is raised to 67,
-and Social Security takes the chained CPI path to a 10% benefits cut,
-and the Bush Tax Cuts are 80% preserved and made permanent,
-and the Corporate tax rates are cut,
-but we don’t eliminate the individual mandate,
Then we’re going to think Obama really kicked their ass?
How does this come out as a victory for the American people?
I’m open to some sort of explanation, but so far I’m thinking that any deal made tomorrow would be a complete victory for the Republicans. My game theory says the only thing that is a victory for Obama is a worldwide panic next week, then the Republicans beg for a clean lifting of the limit.
Anybody?
jl
I think there is no longer much point in trying to figure out what Obama is thinking or trying to do. Better to contact people, politicians, the WH and tell them what you think.
I wrote the WH and said if Obama makes unwise social insurance cuts or endangers the recovery with the debt crisis nonsense, I would find it very difficult to talk to voters about why they should vote for him in the next election.
Some commenters accused me of being a ‘ready, fire, aim’ type of liberal. But cripes, I’ve given a hell of a lot of walking and knocken and doorbanging and rousting lazy voters time to the Democrats over the years, so I figure I have a right to tell them what I think once in awhile.
Oh, wait, this is a blog. Right. OK, here is my theory. I think Obama does not understand economics very well, or maybe just has contempt for it as a real discipline (like a lot of YOU miserable lefty commenters here, may I add).
From what he says in interviews, if he is being honest, his thinking is a confused mix of standard Keynesianism on the one hand, and conservative supply side business friendly neoKeynesian/classical hybrid macroeconomic thought on the other.
I think I can use Stiglitz’ early advice on the design of good stimulus policies to give an example. Stiglitz is a standard ‘sophisticated’ Keynesian in his macroeconomics. His advice was that we do need some stimulus whose only purpose was to increase aggregate demand. The reason for that was that, standard Keynesian theory says that there are times when aggregate demand and supply can stay away from equilibrium for a long time, and aggregate demand is both too low, and increasing towards equilibrium too slowly to do anyone any good. So, you increase demand to correct the persistent disequilibrium.
Stiglitz also thought that IF Europe and emerging economies recovered much faster than the US, the US could have a deficit and debt burden problem, mainly working through our large and persistent trade deficit. So, in order to deal with that possible serious future supply side problem, it would be a good idea for the stimulus to be focused on projects that would increase productivity in the US, and reduce future trade deficits. Thus, ideas like a massive crash energy conservation program for the US.
Turns out that Europe is not recovering much faster than the US as a whole, and in fact is still staving off financial crises at the periphery.
This kind of supply side thought is a business friendly neoKeynesian/classical hybrid that is fashionable among some centrist economists. It basically agrees with standard Keynesianism in that persistent disequilibrium between aggregate supply and demand is possible, but is afraid of any stimulus policy aimed exclusively at increasing aggregate demand will bump into a steeply rising aggregate supply curve unexpectedly, producing inflation first, then stagflation later. So they really approve only of demand stimulus that has an extra benefit, which is spending focused on increasing productivity. Businesspeople tend to like it because it means free or subsidized R&D and investment for their companies.
I think Geithner is the latter type of Keynesian, whenever he is not worrying about the current banking structure being preserved at all costs. And I think Obama agrees with Geithner.
Obama may be confused about these two types of Keynesianism, and economists like Krugman and Obama talk past each other. But Obama probably too smart to be permanently confused that way, and I have read about debates in the early 2009 WH where the purpose of the stimulus spending was debated in detail.
So, maybe Obama thinks he can finesse this debate among Keynesians, with the added advantage that this is what he thinks he can sell politically. But as Krugman recently wrote, most Keynesians do NOT believe it is possible to precisely target government spending to increase future productivity, so best not to try to. Heh heh, the s o s h u l i s t Krugman, like the original Keynes, actually think that in most cases that the market does this kind of thinking best, after externalities are corrected through appropriate tax policy.
Most of these demand side/supply side productivity Keynesians are GOP economists or businesspeople.
If Obama thinks he can finesse the difference, it isn’t working because most of the big name Keynesian economists are pretty smart too. And they have run the numbers and find that it will be difficult to justify enough stimulus to do the job if the rationale is to increase national economic productivity.
So, that is my best theory on Obama’s economic thinking.
IMHO, I think after the debt ceiling is resolved one way or another, Obama needs to realize that he cannot sell one damn thing to the GOP politically, and he needs to start selling to the people politically for the next election. And IMHO patient logical rational explanations of the hybrid businesspeople friendly type of Keynesianism is not going to do that.
Also, in these economic conditions, that kind of conservative business friendly Keynesiansm is in fact not the correct theory to use, and will not produce useful policy, and not produce useful predictions of what policy will do.
Dollared
@jl. This. And Obama is doing the playing.
Mnemosyne
@efgoldman:
Iiiiinteresting. I think the Wall Streeters are finally starting to realize that they fucked themselves by heavily backing the Republicans in 2010.
4tehlulz
If you break the GOP on their only unifying principle (i.e., taxes are the evil), then he’s won.
If he doesn’t, then it won’t matter if the entitlements are “preserved,” since the US won’t have the revenue to pay for them.
Dennis SGMM
Whatever else happens, it’s somehow refreshing to know that Boehner is enough of a free spirit to smoke crack. The responsible path forward would have been to pass a clean bill and then work out any bullshit deficit cutting in the sequel. You know why I chose the word “bullshit.”
Dollared
@4tehlulz
Forgive me but that’s stupid. You seem to think that getting them to compromise 1% is a victory. No, that just rewards them and encourages the next hostage taking.
We have to get a better fucking deal, or we lose. That’s how negotiation works.
Not to mention that our country desperately needs a better deal and a return to Keynesian policies. Without that, we are 30 years from parity from Mexico. How do we
avoid that outcome with Barry the Compromiser?
gwangung
By design, Obama has made himself hard to read to political enemies.
Why, then, do people think they can figure out why he’s trying to do? Particularly when they’re wrong most of the time?
jl
Just a note to correct a possible misunderstanding my previous comment may have produced.
I did not mean to imply that Stiglitz was a conservative Keynesian. Stiglits is a standard modern Keynesian, and I think would agree that the main and over riding goal of stimulus spending now is to increase aggregate demand.
However, Stigltiz also thinks that the economy of the US is royally screwed up, and bad policies for over ten years have put it in a delicate, crisis and problem rich environment for at least the next ten years.
So, Stiglitz advice on the stimulus was an attempt to design the stimulus reduce some of the bad side effects of it performing its main goal of increasing aggregate demand.
Stiglitz foresaw bad side effects regarding high interest rates, debt burden within ten years IF Europe along with emerging economies had a faster recovery than the US. But, Europe is not having a faster recovery. And that fact gives the US longer time to screw up, for better or worse.
Note that the bad stimulus sides effects Stigltiz foresaw were problems that would occur at the peak of the next (ha ha, ‘next’) business cycle and employment peak. So it was a cyclical issue, not a long term secular trend issue. For Stiglitz, the long term structural deficit problems mostly deal with health care costs, and inefficient financial system and that mess is at least 20 years in the future.
Dollared
gwangdung, because we need to know what might happen in the future, and because we need to know if we can trust/support him. He’s not Putin – we have a choice.
4tehlulz
And yet they won’t do even that. Why?
Yutsano
@Dollared:
Yes you do. You have Obama or the Republican who you KNOW will not advance your causes. So what now?
(and not voting is the same as voting in opposition.)
Dollared
Because it’s a good cop/bad cop routine, and Obama has shown that he can be rolled if you push him hard enough. My guess is that Wall Street has their own deadline, and Boehner knows it and Obama doesn’t. The Friday walk was just part of getting more from Obama.
Haven’t you ever bought a used car? We’re just getting worked here.
Tim F.
If the House passes a bill on August 1, the Senate cannot possibly reciprocate in time. All that it will take is for one Senator to get in the way of unanimous consent for a bill to languish in procedure for at least a week.
I vote Rand Paul, though my own Pat Toomey could step up for his old pals in the Club for Growth.
We have already passed the deadline for a bill to reasonably get done in time. We passed a threshold where Obama will have to do something drastic, and possibly impeachable, or else we will have to scramble like mad to keep from defaulting on our debt.
cat48
“”We have to get a better fucking deal, or we lose. That’s how negotiation works.””
This is on Reid & Pelosi NOW! Obama failed, so Boehner decided to whip up a $4T to $5T deal in the Congress, remember??????
Rollcall says they’ve had their first meeting which adjourned at 9:30pm. Reed & Pelosi refused what goopers offered & demanded a clean debt ceiling vote thru 12/12.
Edit: Boehner refused clean vote.
Corner Stone
@Tim F.: President Obama will never use the 14th Amendment. Never. Ever.
Now what?
Dollared
@Yutsano.
There is a point where I vote third party. Romney could not raise the Medicare age to 67. He can’t, because the backlash would be certain and massive. Only a weak, stupid Democrat can. What’s worse, once a Democrat does it, it’s irreversible.
I know what I’m saying. But if the Democrats participate any more in Mexico Lite, then after 35 years of calling third party voters stupid, I reach my limit. Seriously.
Corner Stone
Lots of people here have swooned over the “clean vote”. Not happening.
jwb
Dollared: What choice do we actually have? No Dem except Obama will be elected in 2012. So really the only choice we have is Obama, whatever crazy the goopers offer up, and, if the goopers’ choice is crazy enough, perhaps a center-right third party candidate. If you want to make the argument that we’re better off suffering gooper crazy for four years (or the center-right third party) for an opportunity to elect a more progressive candidate in 2016, you are certainly welcome to make that argument. But if you are talking a left alternative to Obama, you may as well be offering unicorns and ponies.
Corner Stone
@Dollared:
Honestly, I don’t know any longer if it was to get any more from Obama, or squeeze more out of popular acceptance.
It’s all kabuki, in any event, but for what audience?
SIA
Jim DeMint.
cat48
@Yutsano:
Friedman is joining a brand new Independent party. Read abt it in his oped tonite. Then they can come to DC & get rolled.
jl
“and possibly impeachable”
By nutcases in the House, maybe.
But convictable, in the Senate, no way.
And if Obama can keep the country from falling apart by a drastic 14th amendment remedy, I think he will be neither impeachable nor convictable in public opinion.
If Congress can’t raise the debt ceiling and US starts to shut down, we had better hope that Obama become very bold very quickly. That is about the only way I can see the economy surviving, and Obama doing well politically.
I mean, Clinton’s approval ratings went up after he was impeached for blow jobs in the oval office. So I fear not insane impeachment hearings in the House. Probably better they spend their time that way than anything else.
I think its funny when Boehner goes all serious and grave anyway, so there will be entertainment value. As if he believed in any public policy other than cash for him and his friends enough to get all serious and grave about it.
4tehlulz
Right. Obama doesn’t know when the Asian markets open. And “work it out with Pelosi and Reid” is how he caves.
Unless NANCY SMASH is part of the conspiracy to destroy Social Security too in which case even Dennis Kucinich would have been powerless to save it.
magurakurin
Any suggestion that Obama should let the country default and thereby find his victory is insane. Once the full faith and credit of the United States is broken, it’s broken. Forever. T-bills will never again be an investment vehicle that has never defaulted. It will forever be subject to a certain level of doubt. Even a hundred years from now. It’s like the old joke, “but you fuck just one goat…”
Obama may be an evil Republican in disguise hell bent on destroying the safety net as some maintain. I don’t think so, but anything is possible. But even that being proven true would be preferable to the country defaulting. Saying that raising the Medicare eligibility to 67 is a worse outcome than the country defaulting is as nutty as the Teatards who are insisting nothing is going to happen. The saying “between the Devil and the Deep Blue Sea,” implies that there isn’t a happy ending in store no matter what.
jwb
Corner Stone: I used to agree with this. I’m no longer sure. You may be right that he won’t invoke the 14th, but I now think that he will do something extra-constitutional if he believes defaulting will do irreparable harm to the country.
El Cid
The problem is all the taxes and the inflation and all the regulations. If we could just get rid of that then businesses could invest in the economy because, well, they just would, so SHUT UP.
Kane
-Norm Ornstein, conservative congressional scholar, July 2011
-Norm Ornstein, conservative congressional scholar, January 2010
What a world of difference one mid-term election can have.
Corner Stone
@jwb: He won’t. Anyone who’s ever seen him is hard pressed to argue otherwise.
IMO, there is a deal already cooked. They’re waiting to unveil at a most opportune time. Call me whatever epithet you care to, but IMO this will be resolved exactly the way it always was going to be.
Uncle Clarence Thomas
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@119 Corner Stone
Obot!
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.
jl
My cynical side says that there are only two really important considerations in the concessions made by the Democrats.
First is that they be easily reversible, and especially more easily reversible than any cuts that GOP interests tak. Second is that they not hurt the Democrats too much politically.
I won’t deal with the second political part, since I admit I am not that good at that, especially the fine points.
As for the first, here are my reasons. First, the fact is there is no debt crisis now. None. Any mammoth historic deal will probably dampen the recovery at best, and a bad deal might trigger a double dip recession. At the very best any deal will have no impact on the recovery at all, and the recovery kind of stinks.
The economic cost of reversing all these cuts will be exactly zero for the economy as a whole, at most. Probably reversing the cuts as soon as possible will help the recovery regain what weak momentum it had. And specific interest groups will benefit greatly from having the cuts restored.
And politically, I am sure the GOP figures it can win the next election, and therefore this horrifying dreadful crisis number one will become immediately invisible after January 2013 should the GOP win (shudder).
Well, whoever wins, I suspect a slow, gradual, but very steady like clockwork attempts to restore the cuts, starting, oooohhh, lemme guess I would calculate, within a rod or chain or so down that away more or less west norwest o’ here, that would start ONE damn day after the great deal is signed.
So, I want any cuts suffered by the Democrats to be as easy and invisible and unoticeable to reverse as anything the GOP gets.
So, call me cynic, that that is what I think.
Anne Laurie
Some people say that the ‘Red Prince’ oligarchy has gamed out scenarios where, if our own Teahadist reactionaries manage to wobble the global economy, it can be used to righteously repress political dissent in China while reining in the more overheated sectors of their own economy. “Look, over there, the crazy gweilo are scheming to take your jobs and steal your childrens’ inheritance!”
Frankensteinbeck
Dollared thinks that Obama has shown he can be rolled. When has he been rolled? A temporary extension of the Bush tax cuts in exchange for 13 months of social security extension, START, and the repeal of DADT sure ain’t being rolled. We got the ACA and finreg, so that ain’t being rolled. He rolled the GOP hard on the budget debate. I guess he got rolled on Gitmo, although that was by his own party. But in negotiation he’s been kicking the Republicans’ asses this whole time. ‘Obama caves’ is another of those memes I find mysterious.
Corner Stone
@Uncle Clarence Thomas: I fully believe that President Obama’s Got This.
If you don’t like that, then consider my standing invitation for nachos rescinded.
He’s Got This!
jwb
Corner Stone: I’m not convinced there is a deal. And if I could figure out a way to make a financial bet against congress passing anything before 2 August, I would do it. I now think, however, that it is likely that one short term fix will pass at the end of next week to give everyone more time not to come up with a deal.
My only doubt comes from the fact that the financial markets have so far been far too calm, meaning that either you are correct, the fix is in, and money knows it; or money is as clueless as everyone else and we’re in for one hell of a panic.
Dennis SGMM
@SIA:
Max Baucus, who will once again make a principled stand for subsidies to big Ag, and tax breaks for commodities traders.
J. Michael Neal
I’m rooting for a default. Let’s face it, if we don’t collapse the global economy, the Europeans are just going to do it themselves. I refuse to live in an America that is so weak that it can’t create a catastrophe on its own, and instead relies on the Euroweenies to do it for us.
Uncle Clarence Thomas
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@124 Corner Stone
GodDAMN I LOVE that! Also too, GodDAMN America!
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Heliopause
cat48@112
I got through a few paragraphs before the knuckle-dragging imbecility of it stopped me dead in my tracks, as is always the case with Friedman. Leaving aside what a tiresome idiot he is, someone please explain to me where this movement is going to find a more determined radical centrist than Barack Obama. Anybody? Seriously, what are these morons looking for? Somebody who does the post-partisan schtick just like Obama but is better at, what exactly? I swear to Christ, Republicans are particle physicists compared to the likes of Friedman.
jwb
Corner Stone: Damn, now that response was full of awesome.
patrick II
@jl:
Nice post jl.
There has been speculation, from front commentators and front pagers here, and videos of Lawrence O’Donnell all claiming that Obama is a political genius because he wasn’t really trying to make a deal — he was trying to embarrass republicans by proposing a deal with tax cuts. And as anyone knows, that is a non-starter for republicans and they would be shown up for the cads they are.
I disagree with that view. I think Obama wants a deal — badly. Too badly. From what I am reading about this deal, the republicans are not the ones getting played in the game of deficit chicken.
jwb
J. Michael Neal: True, that. What good is it being a superpower if someone else gets to crash the world?
Amir_Khalid
@Heliopause:
I have resolved that, if I ever meet Thomas Friedman, I’m going to hand him my copy of The World is Flat and demand my money back.
Anne Laurie
My grasp of the Higher Financials is hampered by the way that most economists seem to be espousing a bastard combination of theology and sabremetrics. But I am quite, quite sure that the Brussels bureaucrats are daily thanking whatever gods they may or may not profess that our American Idiots are distracting so much of the financial world’s attention from what’s going on in Greece!
Corner Stone
@patrick II: The Republicans can’t be shamed, can’t be criticized as hypocrites, can’t be forced to face any degree of irony or fatalistic humor.
There can be no doubt at this point. There will be an adult in the room.
Corner Stone
@jwb: You, however, are not invited for nachos.
And my nachos rule.
PeakVT
@J. Michael Neal: America, fuck
yeahthe planet!patrick II
A terrible thought I know, but I am awfully glad Murdoch got caught hacking before the Norway tragedy. I hate the thought of that evil bastard hacking into the phones of relatives of victims in Norway to sell a few more rags in England.
J. Michael Neal
As for what Obama agreed to on entitlements, I think it’s a mixed bag.
1) I’m in favor of moving to chained CPI for Social Security COLAs on its own merits. If we want to increase SS benefits, then we should just increase them. The purpose of a cost of living adjustment is to increase benefits in line with the actual rate of inflation. If we come up with a more accurate definition of inflation, we should use it.
However, I’d be in favor of making the Fed do the same thing with regards to its inflation targets.
2) I’m opposed to the Medicaid cuts. Full stop. It’s possible that Obama could get enough in other concessions to make me hold my nose and go along. All that said, the numbers involved are really just tinkering around the edges of the program (though they would certainly hit some individuals hard). The whole damned thing needs to be federalized entirely. Absent that, Medicaid is going to struggle under whatever budget scenario is used.
3) The Medicare stuff is all over the map. Depending upon how the PPACA works out, the age increase may not be a big deal. (May.) Means testing is largely a waste of time, but it’s also a relatively harmless waste of time. The changes in Medigap coverage could be anything. This is one of those things where the itty bitty details are critically important, so there’s no way to judge.
On the whole, whether I like what Obama is doing here depends entirely upon what he’s getting in return. No one has a good handle on that, particularly since it’s probably more than the House would agree to. My guess is that it’s a moot point.
I also remember the wailing and gnashing of teeth at the time of the budget cuts during the lame-duck session. Then it turned out that most of them were complete vapor. This is one of the reasons why it’s so damned hard to tell.
PeakVT
@patrick II: I can’t tell if Obama wants a deal or if he’s playing the most dangerous game of rope-a-dope ever.
Corner Stone
@patrick II:
Who’s gonna stop him (minions)?
jwb
Corner Stone: Not really a nachos fan. I do make an awesome margarita, however.
jl
@134 Anne Laurie
” My grasp of the Higher Financials is hampered by the way that most economists seem to be espousing a bastard combination of theology and sabremetrics. ”
You’re being a little too generous.
Corner Stone
@PeakVT: I’ve been asking this here.
Does President Obama really want the Grand Bargain? Has he effectively used the bully pulpit during this crisis, or not?
Brother Shotgun of Sweet Reason
So what am I doing on a Saturday night? Just got back from seeing Victoria Vox at our local venue. Ukelele, squeezebox, mouth trumpet, and a cello on the side. A fun evening.
patrick II
@Corner Stone:
I assume that the Murdoch would consider that, right now, the downside of his minions getting caught hacking again would be too large.
I certainly could be wrong.
Comrade Mary
This bulldog wants what he wants. Does he succeed?
Canuckistani Tom
72 @ 4tehlulz
Well…
patrick II
@Corner Stone:
It is O’Donnell and others that assert the goal of embarrassment — but I think they mean in the eyes of democrats and most importantly independents, not in the incapable of the self-reflection republicans.
I, on the other hand, think Obama was in it for the deal.
Corner Stone
Man. Billy, Jeffy, Che.
All that shit’s not acceptable here anymore.
Alison
I have an ad on this page right now for Allen West for Congress.
“Help Allen West keep fighting.”
Fighting what? Those nefarious, destructive forces known as decency, intelligence and sanity?
I’d sooner use my money as toilet paper, kthx.
jwb
Corner Stone: He wants the Republicans to agree to increase taxes. He wants an agreement on the long term deficit. He’s willing to give up a lot to get those two items. Only he know what he’s willing to give up. And, yes, he’s going to have to give up everything he is willing to give up in order to get a deal. But it’s not clear that even if he gives up everything he is willing to give up that that will be enough to get a deal. I don’t think it is, which is why I think he’s going to be looking at extra-constitutional options. I don’t think that he believes he is going to get a deal either, but I also don’t think he has been playing rope a dope, in the sense that he has in fact been trying to get a deal. I also think he recognizes that he doesn’t have the luxury of calling the negotiations off because he doesn’t like the options on the table. But, yes, if the paymasters can in fact get enough goopers to agree to the deal, we will in fact be feasting on the grand daddy of all shit sandwiches. But I don’t think the paymasters have been able to secure enough votes yet (or there is another set of paymasters out there who see some advantage to crashing the economy).
Brother Shotgun of Sweet Reason
@The Dangerman:
Why, you have a choice! If white wine is to your liking, Thunderbird will complement the vile taste of the meal with a vaguely chemical smell that can suppress the gag reflex, at least for a little while.
If you prefer red, Mad Dog 20/20, with its cloying sweetness, will smother the bitter aftertaste of dealing with Republicans in any fashion.
JPK
@4tehlulz: I’m just making guesses like everybody else here, but this has looked to me like Obama’s calculation and his game right along. Whether he can make it work or not is another question.
cat48
Corner Stone
@cat48:
If it were that simple, Obama could’ve accomplished that weeks ago.
karen marie
Canuckistani Tom: Hilarious!
cat48
@Corner Stone:
Well, a lot of people don’t seem to know about SP & Moody’s threat to downgrade in 90 days, issued July 14, that the US must have a Deficit deal with $4T reduction, to keep that AAA. They only know the first part about defaulting on 8/2. They also must have a deficit deal.
I think that’s the only reason he would be serious about doing a deal. Since he’s the “first black president”, it would crush him personally because he’s always excelled at everything in life. I think this would be his Waterloo. No attack has really stuck, but this would be HUGE. I can just see the ads now. GOP has to cheat to win you know!
Martin
I don’t believe the goal is embarrassment. I think he really does want that deficit reduction. I think he wanted it before the ratings agencies demanded it but was willing to go without, and now that they’re demanding it, I think he really wants to follow through.
But the GOPs rules make it impossible to achieve that goal. The individual mandate makes the deficit smaller, but the GOP are demanding it be repealed which changes the baseline and requires even more cuts to get there.
Bohners problem is that he can’t deliver votes on anything. I don’t even think he can deliver votes on the deal he’s asking for. He can get any one of a number of deals through (including a clean bill, which I think is what we’ll still end up with) with the help of the Dems, but that’s another one of his rules – the bill has to be GOP only in the House. Of course, that makes it impossible to pass in the Senate. Obama knows this. Reid knows this. McConnell knows this.
Boehner has a way out (Dem support) and he’s going to have to be forced into taking that route. There’s no other way. Even he knows this.
karen marie
cat48: Where’d they come up with the number and why are SP & Moody’s threatening to downgrade if it’s a straight debt ceiling vote w/o a side deal?
PeakVT
@Corner Stone: I can’t tell. If I were to be cynical I might say Obama wants a big deal because he thinks it will help his re-election and his legacy. If I were to be a cheerleader I might say he did a brilliant job of making the Republicans feel like they were winning early on, and the combination of greed/hubris/stupidity in the Republican caucus has led them hold out so long that they will have to cave completely and vote for essentially a clean bill (McConnell’s ridiculous proposal).
My guess is Obama was willing to do a small deal as long as it had some tax revenues. When the wackjobs wouldn’t yield at all on taxes, he tried to call their bluff with a big deal, and it turned out that they weren’t bluffing. And he’s been reacting to events since then.
I think our plutocrats managed to elect a bunch of true believers rather than the pliant tools they expected and are used to. However, the plutocrats are far from unified and some are quite happy to force a crisis AFAICT.
Corner Stone
@Corner Stone:
Looks like no one was wondering but let me just tell you. It was fucking epic.
And the porterhouse tomorrow is going to be so good it may unhinge the edge of the known universe.
burnspbesq
“There is a point where I vote third party. ”
Which is exactly the same as saying “there is a point where I become complicit in condemning my fellow Americans to Republican rule and all the horrors it entails, just so I can get my purity on.”
Which part of “if you’re not part of the solution, you’re part of the problem” are you having trouble understanding?
WaterGirl
@ Nicole
I know I shouldn’t have laughed, but I did. That is completely amazing, such a screwed up response from the senators.
jwb
Martin: “Boehner has a way out (Dem support) and he’s going to have to be forced into taking that route. There’s no other way. Even he knows this.” But isn’t Boehner out on his ass as speaker if he goes that route? Isn’t that why he refuses to consider that option? That and he has to get at bare minimum 15 other Republicans to commit political suicide with him. The only thing that gives me hope—well, hope is too strong a word since a clean debt ceiling seems the best option on the table at the moment—is that the money still seems to believe pretty strongly that a deal is in the offing.
cat48
@Martin:
Martin, you’re probably right. The GOP is cynical enough to do this though I think. It’s also believable to me he really doesn’t mind a few cuts now that don’t harm the Economy & future cuts after Econ starts recovering. I watch Dems lie daily about SocSec being totally solvent & that’s depressing. It won’t survive the Boomers & I like that there is an easy way to fix it. Your CPI posts were reassuring. :)
Medicare has extreme problems. So something has to be done.
I was hoping they could get the Infrastructure Bill included somehow.
Personally though, he doesn’t want a downgrade on his watch. He’ll do whatever he can to prevent it.
jwb
Corner Stone: Enjoy that porterhouse and pack a few more into the freezer while they are cheap. As I understand it, ranchers are culling the herds because of the drought, so beef will be cheap for a spell before it spikes.
General Stuck
I would speculate that it is because the issue of deficits has brought the US to a point of being increasingly ungovernable. And unless the issue is dealt with, and this nonsense will just be repeated again. And markets hate uncertainty, and especially with something as vital as the US paying its bills, and being able to govern itself.
And I think that a historic action to lower our deficit, without fundamentally changing entitlements, would relax a lot of employers that the US is managing its economic affairs in a more responsible way. And loosen current inhibitions to jump back into the hiring and expansion game. But for both political reasons and practical ones, there must also be some raising of new revenues.
The problem is the wingers don’t care about the deficit, as much as using the issue to gut our entitlement programs, especially the ACA. And without getting that, they aren’t going to deal in a rational way, consistent with what they say. Or. at least enough of them to do a GOP majority passage in the House.
And I just cannot accept that Obama knows full well the Goopers cannot break their tax cut religion, and now raise them, without the prize of bringing down the ACA.
Alison
Hey, it’s past midnight in NY. Gay weddings, huzzah!
Tell me, straight married people – have your relationships started deteriorating yet? NOM says they will, so keep an eye out for trouble…
But for reals, congrats to all the newlyweds out there. About damn time.
cat48
@karen marie:
Davis X. Machina
New rule?
Only two of the six ceiling increases (2006, 2003) passed with a GOP majority when Hastert was speaker, and Bush was President — and even then, by one vote, with fifteen GOP defections. The other four only passed with the help of Democratic votes.
cat48
@karen marie:
Here’s a WashPost article link:
http://www.washingtonpost.com/business/economy/on-debt-credit-rating-firms-flex-muscle-with-downgrade-warnings-despite-us-pleas/2011/07/15/gIQApK33GI_story.html
Corner Stone
Climactic scene in Tombstone coming up shortly on CMT, 222 for Comcast.
Dollared
@cat48, S&P does not matter at all. They are bluffing at the behest of Wall Street to increase the pressure on Obama to agree to cuts with no tax raise (especially on carried interest, dividends and capital gains). What part of “they are insanely corrupt” didn’t you get from the last five years?
If we get a clean debt limit raise with no deficit reduction, they will not lower the debt rating.
jl
@168 Stuck
” And I think that a historic action to lower our deficit, without fundamentally changing entitlements, would relax a lot of employers that the US is managing its economic affairs in a more responsible way. And loosen current inhibitions to jump back into the hiring and expansion game. ”
I disagree, and think your economic analysis fundamentally wrong. We will have to argue about it later since I have to turn in early. But in prep for our great future blog flame down thrashout on this, I ask you, can you read Krugman/DeLong/Econbrowser/Mark Thoma Economists View blogs and look at their evidence, and still think that MOST of the uncertainty is due to government debt as an economic issue. Survey evidence is that business owners’ biggest concern since panic and recession is lack of demand for their products, other things are secondary.
Maybe you are trying to tell a story about political uncertainty created by our inability to deal with deficit and debt. I would answer that by saying 1) there is no reason to deal with it now at all with any basis in economic reality; and 2) the fake manufactured crisis is promoted by the GOP solely for the purposes of political destruction, and the GOP has no interest in solving any problems, fake or real right now.
So if we have to come together politically to solve problems and increase confidence, that is a lost cause.
So, will have to get that ol’ confidence up some other way. Say, for example, spend a bucket load of government money on paying people do work on something, anything, or go to school, or retrofit poorly insulated houses, or put in sidewalks, or fix up parks. Pretty much anything would be OK for a year or two.
OK, I cheated. I got a jump start on the debate and now have to go. You can yell at me later. I am a cad and bounder. But I will return to read your response, if you’re still here and feel like it.
Corner Stone
“I was just foolin'”
“I wasn’t.”
TruthOrScare
“Suppose they impeach Obama for saving the country?
And the Senate is still Dem, so as a practical matter it won’t even get out of committee.”
Why would they need to rush the impeachment? Months and months of hearings, where every teatard economist, legal ‘scholar’, and assorted ‘experts’ in other fields appear to provide months of hearings for breathless coverage by our worthless media?
Can’t they just string it along until, oh, say, election day? If the goopers win the Senate (a distinct possibility, given the number of Dem seats to defend) and somehow Obama manages re-election, an impeachment vote on the first day Mitch McConnell takes the gavel, and a conviction vote the following day? Voila, that nasty ni**er problem solved!
Is there anything that says they have to rush impeachment? Seems like months and months of Mad Dog Issa circus hearings would suit them just fine.
I’m sure Really Big Money can be convinced to pour billions into securing huge majorities in both houses, as a hedge bet against the possibility the billions they’ll spend to defeat Obama didn’t turn out to be a good investment.
General Stuck
LOL, I’m not going to yell at you, and that you would disagree with this, as would probly most other commenters on this blog, since I am not a devotee to Paul Krugman, is not surprising. I don’t know if I am right about this, but it is hardly a unique position. Maybe we will find out, though I doubt it since there will not be such a big deal that can pass the House and Senate.
Yutsano
@TruthOrScare: IIRC an impeachment is like a bill of Congress: only good until the session expires. In order for them to impeach Obama, the hearings would have to start all over again. And there is no guarantee the GOP will keep the House for that process to re-start.
JC
Stuck, IANAE, but, as jl says above, I believe this is simple ‘confidence fairy’ belief, which is incorrect. Refer to the blogs jl quotes for more, but from what I understand.
a. Corporate profits are very high. There isn’t DEMAND, which is why there isn’t investment locally.
b. There is still a lot of debt overhang in consumers, business. This is going to continue to unspool over the next 5 years, and also causes lack of current demand.
c. 9.2 percent unemployment, again, destroys demand, and breeds less consumer confidence, which then destroys the wish of business to invest, as there won’t be a market/sales, if demand isn’t there.
d. This action by the Rethugs generates a WHOLE lot more uncertainty for businesses, that anything having to do with the current debt picture.
It may be the case that Obama has bought into something like your paragraph, especially since actual liberal or moderate economists now all seem to be gone from the economic inner circle.
Obama may think he has a duty to do something about the debt issue, even though it isn’t a big deal now, to prepare more for the continuing medical care explosion down the road that will happen the next 10 years. so the U.S. will have ‘more give’ for the next 10 years. (Even though, this will just mean that when Rethugs take over, they will simply create a need for tax cuts again.)
But business confidence has nothing to do with current debt levels.
Martin
$4T is the estimated amount the deficit needs to be reduced over 10 years to remain at the current debt/GDP ratio.
In a nutshell, the ratings agencies are saying that the current debt to GDP ratio is okay, but don’t let it get any higher. And btw, OMB says that the deficit will push the debt $4T over that line 10 years from now, so you have to fix that.
Dollared
If there is a deal already cooked, then the drama is for the rank and file Democrats’ consumption, so they can accept a double dip recession and long term reductions in the safety net because “Armageddon is the alternative.”
And of course, it would mean 20 more years of declining standard of living because without taxes at 22-25% of GDP, we can’t rebuild this country and build an education and infrastructure base that will bring us back towards full employment, never mind do things like get real health care reform and get it off the employer’s tab (which is one of the key drivers of unemployment).
But I’m still just amazed that Obama would consider Gang of Six. I really can’t believe he’s that evil or stupid. So I don’t think the deal is cooked. These guys can’t coordinate that well. So I’m assuming that he’s heading to the brink, to get either 1) the clean raise/McConnell, or 14th amendment via essentially emergency powers.
And I’m hoping that Obama’s neverending string of Reaganisms is just the longest, most exaggerated, most neck-wrenching head fake in the history of US politics. And if it isn’t, I would like to hear how we avoid being the largest Turkey (or Mexico, if you prefer) in the world.
And in the meantime, he makes GHWB seem like a genius at communicating “that vision thing.”
karen marie
cat48: Thanks! I’ve only read part of it, but I’m LOL’ing. Weren’t SP & Moody involved in nodding approvingly at the bullshit mortgage market?
TruthOrScare: If Obama saved the economy, the public wouldn’t put up with an impeachment attempt, especially if it went on for very long.
JC
Also, as Krugman has been pointing out continuously for awhile now – those countries that have embraced ‘deficit fever’, tighten your belts, etc, have gotten a WORSE DEFICIT SITUATION – it’s counter-productive -as again, demand recessions ‘treated’ with ‘tighten your belts’ therapy, simply become worse. And the deficits increase.
Martin
@jwb:
Yeah, but remember that only about 1/2 of the GOP caucus are teatards. The rest are otherwise not completely batshit insane Republicans that are merely terrified about being primaried by the teatards. I’ve got to think that there’s enough there that are unwilling to see national and party suicide take place – and certainly a few are retiring, which always helps them grow a pair.
But heaven help the GOP if the narrative ever becomes that Boehner blew up the country so he could keep his Speakership.
General Stuck
That is your opinion, and I disagree. The economy is not some scientific entity that you can simply run the numbers from this or that economic theory. It has a huge psychological factor of human behavior that cannot be easily deigned, nor dismissed.
And mocking that fact with terms like “confidence fairy” is wrong headed, imo, because confidence is a lot of what makes people tic, and people ultimately make the human decisions that make the economy tick.
Comrade Luke
But isn’t that exactly what the teatards will say if Boehner signs a deal? Nearly any deal?
General Stuck
I seem to remember a Bill Clinton, that pushed austerity and new taxes to bring down our debt, and the economy flourished, until GWB and Cheney broke the bank with the “deficits don’t matter” bullshit. Each country is different with a different dynamic. There is a very good recent example, that for this country, reducing national debt actually promoted econ growth. And running up huge deficits did just the opposite, under Bush.
Corner Stone
@Dollared:
And to me, this kind of signaled it was all baked already.
There are two things I firmly believe, call it what you will.
1. There will be no default.
2. President Obama will not go the 14th.
To me, that leaves us a very short extension to get to the Grand Bargain. I honestly don’t believe there will be a McConnell “multi-staged finger wagging ‘clean’ vote series”.
Corner Stone
Survey after survey after survey of actual CEOs and businessmen revealed every time that they weren’t spending cash on hand because they could not see any evidence of demand.
They may have been spewing talking points to a friendly press in order to bully pulpit, but when asked, time and again they said there was no demand.
Martin
You’re never going to get taxes at 22-25% of GDP. We’ve never had taxes at 22%-25% of GDP. Ever.
You get that base by knocking out the $450B in debt service and probably half or so of the $650B defense spending, and half or so of the $300B in unemployment benefits going out, along with 21% of GDP in revenues. Get us to the 2000 budget, keep it there, and we’re golden.
JC
Stuck,
Make that PUSHED NEW TAXES. Take a look at the bill that set the groundwork.
The seven points are increasing revenue, nothing about austerity.
Martin
@Comrade Luke:
Probably. But at least the country won’t have blown up. I think he’s fucked no matter what he does. The sooner he realizes that, the sooner this ends.
General Stuck
Clinton signed the Welfare Reform bill that gutted that safety net. He cut military spending, and reduced the size of the federal government more than anyone else in recent times. He most certainly pushed both more revenue and spending cuts for the federal government, making it smaller. I don’t care that he didn’t use the term “austerity” in a tax bill, but that is what his policies to balance the budget amounted to
cat48
@JC:
Krugman hasn’t mentioned the downgrade threat from Moodys, SP & Fitch on his blog? Just curious.
JC
As others have said above, the calmness of the markets, seems to me a tell. No one believes this won’t get dialed in.
So what’s the kabuki for?
For Boehner, this all goes to pacifying his Teatardist group. Make a big big show. For all we know, they might have the 20 or so House Repubs already lined up for a clean vote.
For Obama? Now that I’ve linked to what Clinton did, I am beginning to think that something like that is what Obama is doing – a Grand Bargain that gives him ammunition for the 2012 election, and takes these ‘I’m going to blow up the economy’ shenanigans off the table until after the 2012 election.
And both always know they have the clean debt bill vote, in their back pocket?
Dollared
@Cornerstone. You are presenting the most likely outcome. I just am trying to be optimistic. Gang of six is Claire McCaskill’s cap, George Bush’s tax cuts, Simpson-Bowle’s Social Security and Medicare cuts, and California’s 2/3 majority for taxes, all rolled into one. And I left out a few other atrocities, such as territorial taxation.
It would take a very strange Democrat to see that as an acceptable outcome.
Dollared
Stuck, were you alive in the 90’s? Clinton increased taxes and enjoyed the Peace dividend. There was no austerity.
I was in welfare reform politics at the time. Federal effect: actually increased spending about $2.5B/year.
If Obama does Gang of Six, the only thing it would have in common with Clinton is that it involves arithmetic and US Dollars.
JC
Stuck,
Well, of course I agree on the military reduction expenditures. That savesd us lots of money! But welfare reform, truly, was a rounding error for the deficit, and was done for political reasons, not for austerity reasons, in 1996.
the rest was simply ‘good government’ stuff – not that I’m putting that down! Gore did some good work, eliminating a lot of wasteful lobby build boondoggles and ‘waste’ in goverment, in the form of bad private contracts, and streamlining some goverment functions.
Obama and team have been good about that, for the stimuls act as well.
But really, IT’S THE REVENUE, that righted the deficit ship, and isn’t anything about austerity as a practice, in the case of the 1990’s.
That’s an IMPORTANT distinction, and it MATTERS. Because if the wrong lesson is drawn, again, it means an extension of the Great Recession.
JC
cat48,
Not that I’m aware of, recently at least.
General Stuck
Shorter Dollared — I hate Obama so much, I will make up about any kind of bullshit and post it on BJ.
Clinton overall, reduced the size of the federal government more than any president in our lifetimes. You just don’t know what you are talking about.
Martin
Markets aren’t going to move until they need to. They’re very efficient and if they need to move a trillion dollars from point a to point b, they can do that in an hour.
But there’s not tons that the markets can do. If you’re holding bonds that mature in August, you might be fucked, but that’s what, $350B worth, excluding what is owed to SS, etc? That’s not that much. You might want to buy Treasuries in August and you won’t be able to, but that market action will happen in August, not now. As for what general disruption is caused by a default, well, Obama isn’t showing us that hand just yet, so nobody knows what to run from or what to run to.
Dollared
Stuck, call someone a liar, provide a link.
General Stuck
LOL, “peace dividend” “good government” that’s some wild fapping there. Again, Bill Clinton shrunk the overall size of the federal government. It was part and parcel, along with raised taxes, of his declared action to shrink the deficit.
General Stuck
Your the wanker making assertions on this thread, it is up to you to back them up, not me. so back this statement up, sparky
It was reducing spending to balance the budget, and calling that a “peace dividend” is just deflection, and dishonesty.
JC
Stuck,
Well, that is true, but again, it simply isn’t because of austerity. It’s not, Stuck.
If you are looking at population employed, the military dividend applies to a lot of based closed. Also, the contractors started under clinton, which was a nice quick way to get employees off the payroll, while not getting at the expenditures.
And if you look at expenditures, the majority is the peace dividend, and then the increase in revenue, a lot of which was the tech bubble.
I may be wrong, but, if you look at real expenditures, subtracting the military, and without judging against the large increase in revenue beginning 1995, I just don’t think there will be a lot of austerity there.
JC
Well, I never took Gore’s ‘more efficient government’ goal, as fapping, personally. Did you?
and no one disputes the peace dividend.
I don’t think this is worth a big fight, really.
I don’t think you disagree with the fact that we need more regulators, we need a smarter electric grid, there is a lot of infrastructure needs, and the moment has changed. Austerity either wasn’t a big part of what Clinton did, or was small potatoes. But we NEED less austerity now, for a whole host of reasons.
JC
Martin,
You just made me more nervous, not less. Thanks, goddammit!
General Stuck
Think what you will, but I remember Clinton talking about reducing wasteful spending and worked for the feds at the time, and he most certainly did reduce the size of the federal government. And just dismissing his gutting of welfare programs, is kind of silly, and wrong.
That is austerity under whatever name you want to call it.
Martin
Spending was 22% of GDP in 1992 and dropped to 18% of GDP by 2000. Receipts as a % of GDP climbed throughout that period, finishing just above 20%. 2000 was the highest receipts/GDP since 1945.
Data is here: http://www.whitehouse.gov/omb/budget/Historicals/
TruthOrScare
karenmarie @ 183: “If Obama saved the economy, the public wouldn’t put up with an impeachment attempt, especially if it went on for very long.”
And what evidence do we have that the teatards are responsive in the least to broader ‘public’ concerns? If it ain’t pushed on Faux or Limbaugh, it doesn’t exist. How exactly is the public going to stop them?
Heads will roll and the streets will run red in Teatard Land if the teatards don’t have total victory here. Ratings for the hate media will shoot through the roof as Limbaugh hunts his victims. He would LOVE to see Obama twisting in the wind for months on end.
And I think it was Yutsano who said they’d need to start new hearings if the GOP holds the House and takes the Senate in November. After months of circus hearings, I think that any needed ‘hearing’ could take place in, oh, about 10 minutes after the new Congress is seated. They would have a ‘mandate’ from the voters to dispense with a lawless president whose union thugs stole the election for him.
We are dealing here with people who are determined to destroy the country’s full faith and credit. They won’t hesitate to do whatever it takes to see Obama gone. He must leave office in disgrace.
Svensker
Huffpo is reporting that a “Super Congress” is being considered as a way out of the debt negotiations. Is this really an Onion piece?
Is this completely loony or am I just too tired?
Dollared
http://www.angrybearblog.com/2007/06/comparing-presidents-size-of-government.html
Here, Stuck, I did your homework for you. Federal employees went down under Clinton, but the numbers are miniscule – 0.050%. Three reasons: Military demobilisation, outsourcing, and cutting enforcement at places like SEC, FDA, DOL and INS.
However, the budgets went up, every year, despite the defense reductions. 1993: $1.41T, 2000: $1.79T http://www.cbo.gov/budget/data/historical.pdf
Clinton was good at budget management, but he had rising revenues and he spent most of those rising revenues.
And Stuck, I don’t hate Obama. I just won’t take a shit sandwich from him and tell everyone it’s tasty. I guess I really could have used some military training.
General Stuck
Neither did I, and how on gawds green earth did you attach Al Gore to my fapping remark.
But it isn’t worth a big fight, but you are simply wrong.
Davis X. Machina
@Svensker: They’re in love with BRAC, the base-closing commission, because it represents a way to have a corpse without a murderer, and are trying to replicate it here.
Every politician’s dream is to be able to vote for and against the same piece of legislation. Failing that, not having to vote for or against it will do nicely.
We’re looking at the second one.
Me, I’m invoking Goldman, not Godwin.
Dollared
Martin, read your own sources: govt as a % of GDP, not in absolute terms. Now read my links. Clinton grew the budget 28% in 8 years. Not bad, but not austerity. He just had a lot of revenue and rapidly rising GDP as tailwinds.
Yutsano
@Svensker: Wow. How beautiful and totally unconstitutional.
Martin
Fucking inflation, how does it work?
JC
Stuck,
No, factually, I’m not. Sorry. At this point you are simply making assertions, and while you and I are on the same page with where we want things to go – we are in the same trench! – in this case, you need to do more than simply assert.
Dollared’s links are good here, although, against those links, most of that increase can probably be accounted for in Medical expensese (our big bugaboo).
I’m not saying there was no austerity – I’m sure there was some. Easy to mislead with numbers, without context, in either direction.
But REVENUE was the big deal. REVENUE was the big change. REVENUE – in the form of 7 revenue increasing points, was the big change, helped along by the go-go late 1990’s.
General Stuck
As far as I’m concerned, you are one of smarmiest Obama haters on this blog. And you don’t need a shit sandwich, just wrap a bun around yourself and there one is. Your passive agressive sctick toward all things Obama is getting stale, like some others.
Barack Obama is twice the better president than Bill Clinton and his republican light governance. Clinton couldn’t even come close to matching what Obama has already accomplished in progressive legislation. And spending for welfare did not go up after the Welfare Reform Act was passed.
JC
At any rate –
INCREASE THE REVENUE!!!
Svensker –
I’m not surprised – let me get elected to Congress so I don’t have to vote, so I can be re-elected for a few years, and then get on the lobbyist gravy train.
Cowards.
JC
Dollared,
We don’t know it’s a shit sandwich yet though, do we? Obama has, at least one and half successful negotiations under his belt.
The December extension of Bush revenues, for the UI and other stuff. (I count that as a 1/2 win, others count it as a full win, given the landscape. That may well be true, but given he didn’t secure a debt limit then, I stick by my half.)
The budget deal, where the ‘cuts’, were some ludicrous few billion or so, in REAL money.
I consider that a huge win, in the face of a hostile House.
So I worry, but the fact his, he’s batting 75%, in the low example set.
Davis X. Machina
@Yutsano: It’s unlikely to be unconstitutional. Parliamentary bodies have wide discretion in how to conduct their business, and make their own rules.
This is another joint committee — which committees already exist — whose report, given the form of legislation, is to be acted on in each House under rules limiting amendment and debate — which rules also already exist, e.g. the budget reconciliation process.
There’s not a fly on it from an Article One standpoint.
FlipYrWhig
What is it that Obama is proposing that would qualify as “austerity” as opposed to “good government”? Until I see something convincing, this whole debate seems like a lot of ex post facto being applied to Clinton and a lot of Minority Report-style precrime analysis being applied to what Obama must be about to be thinking.
I don’t believe in the “kabuki” theory. I think Obama really does want to make a grand deal that “bends the cost curve” on government spending. I think the emphasis has been, and continues to be, long-term, not short-term (and when you say “austerity” I presume that means short-term). I similarly think that Obama has taken the stances he has in order to say, “Fine, Republicans, you got into office with a lot of bleating about spending cuts. Well, let’s get serious. If you want to cut, let’s cut. I’ve got a big list of what I’d do, and I’m pretty confident it would work. You want to talk about taxes? I’ve got a big list of things I’d change there, too. What do you have? Whip it out, unless you’re embarrassed or something.”
IMHO his position has been to take Republican cut mania and articulate instead something like a Democratic/progressive theory of how to reduce deficits and debts intelligently and without doing so on the backs of the most vulnerable.
From a purely economic perspective, I agree that it’s vexing (to say the least) to have a whole drawn-out discussion of “spending cuts” rather than one about shocking the job monkey to life. But we’ve got one bed, Republicans already shat in it, and now we’re discussing getting the shit out of the bed, not what the next bed is going to look like.
(My constructive criticism for Obama would be that I’d like to hear him taking a few more swipes at how the “cut” discussion is important in the long term but ought to be a secondary consideration at the moment. Make it clear that the whole thing is something he’s doing grudgingly. Maybe that would seem too much like admitting that Republicans have knocked him off track, I dunno.)
Dollared
Martin, ease up big fella. I’m not saying Clinton was a big spender. But inflation was crashing in 1993-2000. Clinton’s budgets were in line with or just above the inflation rate. FYI- inflation, under 3% per year 1993-2000. http://www.minneapolisfed.org/community_education/teacher/calc/hist1913.cfm
Obama needs to eliminate the Bush Tax Cuts. It’s what we hired him to do. Then he can reap the peace dividend. Unfortunately, there’s no new innovation like the PC to give him even more tailwind – any new innovation will be manufactured in China, so innovation will actually increase our trade deficit. That’s why it is so essential to restore public sector spending and increase investment in education. The private sector is shrinking in the US from structural issues – the public sector has to invest to fix this or the standard of living decline will accelerate.
Government austerity is exactly the one thing that can make our situation worse.
General Stuck
Clinton drastically cut military spending and gutted welfare programs that went too far and hurt a lot of people. Obama is not even coming close to that drastic reform in his negotiation.
And your dismissal, attaching some Orwellian term like ‘peace dividend” is dishonest. They were spending cuts, regardless of whether you approve, or call them something else.
JC
Dollared,
It’s a weird moment. See, this is a great summation, of what the liberal/moderate economists say. And have been proven right about, from 2008 onwards.
And yet – no one in Washington seems to even understand the argument. And the liberal economists who did, have been pushed out right? Romer? Bernstein? Krugman has said ‘been there, done that’, in terms of speaking with Obama off the record.
And in Europe, it’s even worse.
The rentiers have not only captured the conservatives, but in a lot of ways, have captured liberals who otherwise would agree with us.
In this way, it’s a lot like the Iraq war. The ‘serious’ people talk about austerity, the same way the ‘serious’ people talked about invading iraq. And it simply makes no sense, does it? Factually, makes no sense.
General Stuck
jeebus fucking christ
JC
Stuck,
Whatever, at this point. You aren’t out to discuss at this point, just assert, and win points. If you don’t back up your assertions, just make your points, and I’ll deal with those who are actually discussing things.
JC
Maybe that is the best that can be done, in this environment. But the focus on austerity is simply wrong, and backwards, when what we need is a stimulus like WW2, without an actual war.
Yutsano
@Davis X. Machina: Okay, the way Hufflepuff worded it made it not pass the smell test for me. However it was also my understanding that Congress couldn’t change its basic rules mainstream, which this sounds like it’s doing. Not to mention there is nothing limiting the scope of what can be voted on here. It basically reduces the size of Congress to twelve individuals.
General Stuck
Are you saying that Clinton did not drastically cut military spending
Are you saying he didn’t pass welfare reform that delivered more cuts, at the expense of the poor.
Those are my assertions, they are historical facts. Do I really need a link for this common knowledge?
And I’m not trying to score points, I am trying to point out the unfair and bizarre harsh judgment of Obama by some, and make the point that spending cuts was a part of Clinton’s and none more anti progressive than the welfare reform savings to the government, at the expense of the poor.
Davis X. Machina
@Yutsano: Basic rules — these are the committees, their composition is thus and so, yes. The rules under which any one piece of business in the House is conducted come out of the Rules Committee, which is basically the Speaker’s office, and then to the House floor.
See, e.g. the rule change for consideration of H.R. 1.
It looks to me like Boehner’s making himself a safe room that he can keep Cantor and McCarthy and company from getting get into, and trying to come up with something short of legislation to wave at the bond market.
It’s also not a sign of a normally-operating parliamentary body.
Yutsano
@Davis X. Machina: So the Great Oompa-Loompa is trying to get around the teatards and put all his hopes with Pelosi. Teh irony, it is delicious. And if he thinks he can pull this off in eight days he’s a fucking lunatic.
Bender
So, wait a minute. This takes some real balls by Harry and some real gullibility and intellectual laziness from the media (What are the odds!) We are supposed to believe both of these things, if we listen to the Donkeys:
1) If there is no debt ceiling increase by Aug 2, then the economy of the US crashes in flames, and it’s all the GOP’s fault. The US defaults on its bonds, national credit ratings plummet (never mind that this is starting already, and not because of the ceiling), interest rates skyrocket, dogs and cats living together, etc. ARMADEBTON!
2) Democrats must reject a short-term deal to raise the ceiling, because a renewed debate about government spending in November 2012 could hurt Obama’s/Dems’ election chances when the country sees the debt still skyrocketing — ERRRRRR, I mean, it might send a “message of uncertainty” (because that’s what the markets care about in Harry Reid’s hamster-wheel cranium). So a one-year deal that expires August 2012 leaves uncertainty in the market, but one that goes to December 2012 is like a warm blanket to the ratings agencies. Riiiiiiight, Harry. We don’t see through that at all.
[An Aside: Isn’t this “message of uncertainty” the same reason we had to bomb Libya? At least come up with new shtick, Donkeys! And shouldn’t we leave the markets uncertain, because uncertainty is the best we’ve got to offer? Right now, the raters seem pretty damn certain that the US has a serious debt problem that Obama won’t fix.]
So how do you make 1) and 2) make sense to Americans? (Easy: a compliant, complicit, leftist national media who don’t ask no queshons, knowwhaddimean!)
Even if a one-year deal is the only thing on the table to avoid their own predicted Debt-pocalypse, the Dems will reject it because any deal must run past Election 2012. It sure sounds as if the Dems have prioritized electoral politics over the good of the economy, doesn’t it?
But of course, if the Dems reject a one-year deal to Save The Economy in favor of saving their election chances, it’s still all the GOP’s fault. Right, Juicers?
Dollared
Stuck, I think cutting military spending was a brief moment of sanity. And “peace dividend” was GHWB’s exact term for it.
And if it ruined some people’s lives, well, they should have devoted their lives to more beneficial things. That is a bit callous, but it reflects my values, and I know many engineers who are poorer, but proud they didn’t build nukes.
As for welfare reform, the savings were long term, not short term. And welfare – Aid to Families with Dependent Children – was always a very small slice of the budget and the population. Never more than single digit billions.
So your facts are right, but they don’t compare to cutting all Social Security benefits 10% for people who have worked and paid all their lives, and delaying Medicare for two more years. Where is anyone going to get insurance for years 65 and 66, especially without employment? And these programs are supposed to be off budget.
FlipYrWhig
That’s why I’d say Obama is not, in fact, intent on “austerity.” Austerity to me means short-term cuts with tangible effects on ordinary people. I think the whole premise to Obama’s negotiating strategy is to sketch out long-term cuts–or savings, depending on your perspective–with negligible effects on ordinary people. (I think that was the cornerstone of HCR and the cornerstone of the ill-fated energy bill, so I think it’d be logical if that were to be the cornerstone of this deficit/debt negotiation.) If so, that wouldn’t constitute “austerity,” and hence shouldn’t trigger the same verbal brickbats from Keynesian economists about why austerity is bad.
Davis X. Machina
@Yutsano: Well, it’s either the last act of a desperate man, or the first act of Henry the Fifth.
Yutsano
@Bender: You don’t think we need to increase the debt in the first place. So why do you care?
@Davis X. Machina: Isn’t that kinda redundant? :)
JC
Bender,
Number one – debt ceiling has been raised 74 times since 1962. I’ts an uncontroversial housekeeping vote.
Raising the debt ceiling is what a responsible Congress does, to pay for budgets already enacted.
NOT raising the debt ceiling damages the ‘full faith and credit’ of the United States. Period.
Only if there is some deal that both sides can agree to, should there ever be anything other than a debt ceiling raise, no conditions.
So really, this is a moot issue. The ‘politics being played’, originates from the Republicans.
Dollared
Bender: Reagan: Raised it cleanly 17 times. Now go away. We’re trying to save your country.
General Stuck
almost all of Obama’s cuts are also long term.
Really? we don’t even know what Obama is prepared to cut from entitlements, but most of the proposals are progressive in nature, like means testing and a new COLA formula, that may end up helping lower income seniors, at the expense wealthy retirees. So you are working from incomplete information. And treating it like there is a formal proposal with these things in them. And strengthening especially medicare, that is in need of fixing, fairly soon. And the cuts also have things like bargaining for lower drug prices.
cat48
@FlipYrWhig:
Corner Stone
@FlipYrWhig: Dammit. You summoned me for nothing?
Me and Sockina are going back to bed.
JC
Fair points, all.
I think why the brickbats come, is because politically, it often LOOKS as if false Beltway frames of ‘austerity’ are being adopted. OTHO, this is one of Obama’s strengths, is this particular judo move, of taking those frames, and then ending up with where he wants to go.
And so, I end up talking to liberals who tell me, ‘we need to cut spending’, because they see Obama saying these judo things, and it drives me crazy, because we need to raise revenue, and spend our way out of the Great Recession.
FlipYrWhig
@ Dollared : It depends on whether the “cut” to, say, Social Security benefits is measured as
1) “how much smaller of a check will I get as compared to the one I’d be getting if things continued unchanged?”
or
2) “how much less purchasing power will I have as compared to what I’d have if things continued unchanged?”
In theory, you could get a check that was outpacing what you actually need to do with it, because of a mismatch between how fast the check was growing and the rate of inflation (perhaps calibrated to reflect how future older people or poorer people actually spend their money). Is that a “cut”? You could not unreasonably call it one. But it might be both good policy and, more importantly, undetectable in the day-to-day life of an actual older or poorer person in the future.
To be kind of cavalier, if Social Security payments were set up so that everyone got a special bonus to offset the cost of a fresh new buggy whip each year, would it be wrong to cut that bonus once no one was buying buggy whips?
General Stuck
Going to bed. My brane hurts.
JC
Last couple of points – people like Bender just show us just how out of touch with reality people can be.
Second, after Obama’s sweet sweet press conference, I’m a lot less inclined for brickbats in Obama’s direction.
I’m also gone for the evening. Nite all.
FlipYrWhig
@ JC:
Yes! I think he does it so well that he can fake out his own side… and _especially_ the media. Like when a particularly believable pump-fake confuses the cameraman and the whole audience ends up watching everything but the ball.
FlipYrWhig
@ Corner Stone : I was wondering if it was like “Bloody Mary,” where if you say the name three times the evil spirit comes through the screen at you.
Dollared
‘Nite all. I think we’re all seeing the same thing – which is so fuzzy we all talk to each other trying to reassure ourselves it will come out well.
Except for Bender – but by Gawd if they just keep it up eventually they’ll be able to deny their way past the speed of light……
Lysana
@Alison:
As a bisexual in a mixed-gender marriage, I’m not sure if I’m a threat already or not. NOM thinks I’m tame, at a guess, but that’s not a safe assumption.
Yutsano
@Dollared:
They do that the selfish bastards better fucking share.
Taylor
Let’s be clear, interest rates were high in the early 90s after the Reagan fiscal insanity. By increasing revenues, Clinton brought down interest rates. The tech bubble (remember, it was a bubble) artificially inflated revenues. The deficit went down because Clinton couldn’t get any new spending programs through the Republican Congress.
Today is completely different. Interest rates are almost zero. Tinkerbell the confidence fairy is not going to reward deficit reduction by magically increasing consumption. To do that, you need to put some money in the pockets of the fucking consumers.
And we’ve now got a $2T deficit in infrastructure investment. The is the real tell for the future of this country.
liberal
@213 Dollared wrote,
As I think you alluded, measuring Fed government size using employee counts is meaningless. I work for a large, well-known government organization as a contractor. (I don’t have the contract myself; I work for a large firm that does.) In every essential essence I’m a Fed employee; the company I work for provides zero expertise and just acts as a payroll administrator. But most importantly, it’s just a pass-through. The whole thing is a joke and a shell game. It presumably also costs the taxpayer, since there’s extra admin expense and profit that has to be paid to the company. (Yeah, Feds would have to keep tract of payroll etc if I were a true employee, but that’s all marginal since the infrastructure is already there.)
Only good thing about the setup is that it’s much easier to fire nonperforming workers, which (despite my considerable left-wing sympathies) is a good thing—these days it’s absurdly difficult to get rid of deadwood at the Fed level.
Bender
@ JC (where the hell is our reply link?)
You’re working really hard to ignore the whole point.
1) It was uncontroversial when the deficit was 3-5% of GDP. Under Obama it’s 11% with Medicare and Social Security bombs (and a debt-filled national health insurance law) on the near horizon, with a stagnant economy. This is not your father’s deficit.
2) So Obama should take the one-year deal, right? It raises the ceiling. Crisis averted! If one year’s good enough for a budget (as if the Democrats have one of those, right?), why not for a debt-ceiling increase? What’s magic about taking it through the next election? Hmmmmm.
3) As to “housekeeping,” that’s not what Senator Obama said in 2006, when voting (along with every single Democrat) to reject a rise in the debt ceiling, was it?
History is a bitch, isn’t it?
1) Not likely. Default under the present circumstance is a fiction raised by scare-mongerers searching for a political victory through deception. It won’t happen unless Obama wants it.
2) Deficits of 11% of GDP with no real spending cuts caused one agency to downgrade the US yesterday. They didn’t even mention the debt ceiling, because they aren’t fooled by the scare tactic of default.
3) If what you say is true, please to explain the 2004 and 2006 votes in which every single Democrat voted not to raise the debt ceiling.
4) So take the short-term deal already!
1) Then Obama/Reid should take the one-year deal and put their money where their mouth is. Don’t be afraid of November 2012!
2) This is one of the few battles in Washington that isn’t only politics, but a real policy fight. The Republicans think that deficits of 11% of GDP are unsustainable, they don’t think a Socialcrat will ever cut government spending of his own volition, and they have chosen this ceiling issue as a battleground to force cuts. The only politics involved comes from the American people — the way it is supposed to be — who elected the GOP in the 2010 landslide to get Washington on-budget.
Bender
No, thanks, Aquaman. You can stop “saving” us now. You’ve done enough already.
Bender
@ JC:
Yes. Specifically, I’m showing you how out of touch you can be. To wit:
Indeed.