First Step Off a Cliff

Now that it’s done, the President is calling the debt-ceiling deal “an important first step to ensuring that as a nation we live within our means,” but it looks more like falling off a political precipice.

Even as he reiterates that “we can’t balance the budget on the backs of the very people who have borne the brunt of the recession,” Barack Obama says ruefully, “Voters may have chosen divided government, but they sure didn’t choose dysfunctional government.”

Today, even divided government may sound like an advance from where we are as John Boehner crows, “When you look at this final agreement that we came to with the White House, I got 98 percent of what I wanted. I’m pretty happy.”

Yet the Speaker may be whistling in the dark as much as the President because 98 percent won’t be enough for his Tea Party zealots who, having failed to send government crashing down, will be on his heels to keep pushing it harder toward the cliff edge.

As Barack Obama tries to recoup his political equilibrium by passing off what just happened as no big deal, the truth is that his Bad Deal will be seen in contrast to FDR’s New Deal to restore the economy from the Great Depression.

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Author: ROBERT STEIN

  • Allen

    yeah come election, Boehner and his band of terrorists are going to get the condemnation he worked so hard for. Mark my words.

  • DLS

    Wow, y’all are still unglued.

    [shrug]

    Here — the spending reduction you fear isn’t quite what you fear, as shown below.

    It does take us closer to the cliff, the real cliff, not your nightmares.

    There is something you should know about the deal to cut federal spending that President Obama signed into law on Tuesday: It does not actually reduce federal spending.

    By the end of the 10-year deal, the federal debt would be much larger than it is today.

    Indeed, both the government and its debts will continue to grow faster than the American economy, primarily because the new law does not address federal spending on health care.

    The problem facing the nation has been clear for some time. The Congressional Budget Office estimates that the federal debt is likely to exceed 100 percent of the nation’s annual economic output by 2021, largely because of the rising cost of Medicare, Medicaid and Social Security.

    Americans will face higher taxes, particularly as investors begin to demand higher interest rates. Economists disagree about the amount of debt a nation can safely carry relative to the size of its economy, but there is widespread concern that 100 percent is too much, and that the weight of debt would begin to suppress economic activity.

    Stabilizing that ratio would require about $4 trillion in cuts over the next decade, according to a number of independent analysts. That is also the target that S.&P. declared the nation must meet, and it was the goal of the “grand bargain” that Mr. Obama tried to reach last month with Speaker John A. Boehner.

    “We are actually cutting spending,” said Representative Paul D. Ryan, Republican of Wisconsin. “That’s cultural, that’s significant, that’s a big step in the right direction.”

    Critics, however, are skeptical that Congress will follow through. They note that Congress imposed similar limits on spending in the 1980s and ’90s, only to grant itself repeated exceptions. They said that cutting specific programs would be a more credible strategy.

    “It does nothing to address the real drivers of our debt,” said Senator Tom Coburn, Republican of Oklahoma, explaining his decision to vote against the bill. “It eliminates no program, consolidates no duplicative programs, cuts no tax earmarks and reforms no entitlement program.”

    http://www.nytimes.com/2011/08/03/us/politics/03spend.html

  • http://wideeyedandreal.blogspot.com ProfElwood

    Go to the Google home page, click “News”, then choose “Business” (although the World, Health, Science, and Technology tabs haven’t sat still either). Now read all the headlines and try to rectify them with the left’s narratives.

  • JSpencer

    Of course cuts are necessary and there will be more, but tax increases on the wealthy and the end of tax loopholes for influential corporations and financial institutions have to be part of the process or credibility suffers. That is what the right still can’t seem to grasp.

  • http://wideeyedandreal.blogspot.com ProfElwood

    @JSpencer
    There’s a difference between tax reform and tax increases. I’m sure the TP freshmen would be more open to reform. That’s not what they were offered.

  • DLS

    There’s a difference between tax reform and logically-and-morally-defective left-political misuse of taxes as a political weapon.

    There’s so much to say about real reform but it may be wasted…