It’s quite a time we’re having here. After convincing much of the public that the reason they had no jobs and no money was Teh Deficit, suddenly the existential threat we faced was the deficit reduction plan they’d all been clamoring for. Now that we’ve avoided the deficit reduction plan, we can go back to talking about how the problems are that your grandma is too rich and also, too, Teh Deficit.
Grow the damn economy and the deficit disappears. The end.
Krugman points out his issues with what this deals is likely to mean for the future, That Bad Ceiling Feeling.
So, why am I feeling so despondent, and why do so many other progressives, like Noam Scheiber, feel the same? Because of the way Obama negotiated. He gave every indication of being more or less desperate to cut a deal before the year ended — even though going over the fiscal cliff was not at all a drop-dead moment, since we could have gone weeks or months without much real economic damage.
Now, given his evident antsiness to cut a deal in this case, how credible is his promise to hang tough over the debt ceiling, which is a much brighter red line? He may say that he absolutely, positively won’t negotiate over the ceiling — but nothing in his past behavior makes that believable.
Maybe this time will be different. Maybe the Treasury is secretly preparing to invoke the 14th amendment, or issue a trillion-dollar platinum coin, or direct that the whole budget gap be taken out of spending dear to Republicans. But I have to say that I now expect Obama to cave on the ceiling; and so, of course, do the Republicans, which means that the crisis is going to happen.
The only thing that might save this situation is the fact that Obama has to be aware just how much is now riding on his willingness to finally stand up for his side; if he doesn’t, nobody will ever trust him again, and he will go down in history as the wimp who threw it all away.
But even that may not be enough. I guess we’ll see.
Here’s how the above mentioned Scheiber ends his piece and it’s easy to see why all of us on the left should be scared of what’s to come, The House Comes Around on the Cliff. Why Am I Not Reassured?
Put all that together and here’s what the fiscal cliff accomplished then: It affirmed to Republicans that Obama will do pretty much anything he can to avoid a debt default, regardless of what he says. It affirmed the White House anxiety that the GOP might not blink before we default. To put it mildly, that’s quite an asymmetry. I want to believe the president can get through the next stage in this endless budget stalemate without accepting some of the more dangerous spending cuts conservatives are demanding. But at this point I’m having a hard time seeing it.
A President who’s too willing to compromise and the GOP crazies in Congress who who know it. Obama wants a “legacy defining” deal that, for him, must involve entitlement cuts, and only he knows why. Why he’s so eager to inflict pain on the least and leave those at the top mostly unscathed continues to be a mystery.
It’s time those of us on the left realize that the deals he keeps cutting are what he wants, and he’s a moderate conservative when it comes to social and economic policy. He’s not a Keynesian or a New Dealer.
Here’s more on analysis on the deal:
Brains and Eggs, Let’s meet back here in a couple of months and do it all over again.
The Atlantic, Why Everyone Hates the Fiscal-Cliff Deal.
Mike Lux, Winning Victories Amid the Mess: Far Bigger Battles Ahead.
How they voted in the House, Behind the fiscal cliff vote.
The resolution to our economic issues is right in front of us for all to see. Grow the damn economy and the deficit disappears. The end. But there’s is no one in a position of power right now that is willing to pursue that agenda. Until there is the current ginned up crisis schemes will persist.