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All Good Democrats Applaud Republicans Rearranging Battle Lines in Austerity Phony War

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As we anticipated, the Republicans have climbed down on making the debt ceiling the key battle line in their plan to impose spending cuts. Good Democrats applauded that move as a sign that Obama had displayed toughness and prevailed.

It’s not quite that simple.

First, if you widen the frame, the budget jockeying is largely kabuki: which team is going to score more points that appeal (or more accurately, can hopefully be spun to appeal) to their base? The reality is that both parties are fully committed to imposing austerity. The only question is whether we get Dem Lite or Republican Hi Test. But rest assured, neither version will be good for ordinary Americans.

Second, the Republicans have not dropped the deficit ceiling cudgel, but they seem to recognize that it is a mutual assured destruction weapon, and therefore not as useful as they once thought. They seem to still be coming to grips with the negotiating implications. As the New York Times reports, the Republicans are willing to extend the deficit ceiling for three months, but that increase was conditioned on having the Democrats approve a budget (during the Obama administration, no budget has been approved; the government has carried on because Congress has passed spending resolutions). Notice that while Obama has said that he would not discuss deficit cuts under a debt ceiling sword of Damocles. But if he accepts this deal (which includes a gimmick, of having Congresscritters go unpaid if they can’t agree on a budget on the normal timetable), he will still be doing that. So why is this a victory of sorts?

The more important part of the New York Times story on the Republican climbdown is that Dave Camp, the House Ways and Means Committee chairman, disabused his fellow party members of the idea that the government could limp through hitting the debt ceiling by using tax proceeds to pay only debt obligations, Social Security, the military, and other critical needs. So the Republicans can’t refuse to raise the debt ceiling and not do serious damage, pronto. And everyone would blame them for their intransigence. So unless they want to play Major Kong, they will probably continue to play ball with the Democrats on debt ceiling increases while trying to save face about it.

Third, as we said earlier, the Republicans have two battle lines they intend to fight over. The fiscal cliff deal expires March 1, so roughly $1 trillion of budget cuts kick in then. That’s considered by even most pro-austerity (as in mainstream) economists to be too deep, and the sequester would hit the military budget pretty hard and spare Social Security and Medicare, when both parties want more “entitlement” whackage and comparatively little in the way of cuts on military spending (and guess what, they want those to fall on health care and pensions). The deadline after that is March 27, when the current spending resolutions expire. So the Republicans have six weeks to pound the public with the message that the irresponsible Democrats don’t balance their books, and not passing a budget is more of the same.

Now it is undeniable that having the Republicans climb down from their “we’ll shoot the economy if that’s what it takes to get our way” stance is a step forward. But this tactical retreat was led by the Kochs, so I would not see this a sudden outburst of Republican temperance.

One way to tell how much the Republican bloodlust has faded (or not) is how hard they fight to delay getting Obama’s new Cabinet members in place, particularly incoming Treasury secretary Jack Lew. Having Lew not in officially as Treasury chief would be at a minimum an inconvenience (any reader input on what an appointee in waiting could do beyond advise informally is very much appreciated). Jack Sessions, the ranking member on the Senate Budget Committee, has said Lew must never be Treasury secretary, but he has not said whether he plans to filibuster the nomination. (Interestingly, filibuster reform, which seemed to be a Democrat priority, or at least was bruited about in December, has not been talked up much lately. If the Senate is going to move forward, it would behoove them to move quickly). Having Lew’s appointment delayed could hamper the Administration’s negotiating efforts.

Let’s put all this Democratic cheering in context: Obama is still eager to get budget cuts and “reform” Medicare and Social Security. We are likely to see those “reforms” given priority because both sides agree on that topic more than they do on how to implement the other elements of austerity, meaning spending cuts versus tax increases, particularly on upper income taxpayers. Obama does not have a strong point of view as to how deep cuts need to be, so long as he can preserve appearances that he is Being Responsible about the deficit and inflicting some pain on the wealthy. That gives him tons of room to sell out ordinary Americans.

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70 comments

  1. ArkansasAngie

    The goal is to keep people wedged over irrelevant(fake) issues to keep them from banding together to throw the crooks (status quo) out.

    Got to keep the sheeple fighting over scraps instead of going after the gravy train.

    Austerity? Spending? It is a shell game.

    Don’t listen to their words … watch their hands.

    Who loses the most if moral hazard is enforced?

    I don’t want to tax Warren Buffet et al … I want him (them) declared bankrupt.

    That is change I can believe in.

    1. Jack Lohman

      100% on target. But how do you get there when the politicians are getting a piece of the action? Only one way: 100% turnover at each election until we get 100% public funding of campaigns.

      1. ArkansasAngie

        I’m with you!

        And … guess what … I don’t care whether you are a republican, a democrat, a right to lifer, a member of PETA or the NRA.

        On this issue we agree

          1. Aquifer

            Frankly i always thought term limits was a bad idea – for one simple reason – the “bad guys” always have someone in the pipeline ready to move up – the “good guys”, OTOH – it’s like pulling teeth to get one to run and if you can actually win, what a bloody shame to have to lose them – for me, if you want to “term limit” someone, vote ‘em out of office ….

      2. scraping_by

        The other way is elections that total the votes accurately. Right now, electronic voting seems to have a strong positive effect on incumbent retention. And on the success of far Right candidates generally.

        Or is that foily?

  2. jake chase

    The details of this pissing contest between two sets of hypocrites all of whom are totally in the bag could not be less interesting to anyone whose life will be affected by the outcome. The 99% will be getting screwed and the 1% will be going to the bank. Meanwhile, the Nation reels with each new revelation concerning Lance Armstrong and Monti T’eo.

    Personally, I am eager to see how Kapernick makes out in the Dome on Sunday, and hoping Baltimore can make things hot for Brady.

    1. Buckaroobanzai

      Yes…we are all going to get screwed. But at least Obama and the Democrats are going to make it look like a real date and take us out to dinner first.

        1. NotTimothyGeithner

          Somehow I just don’t think Edward Brooke would care for that comparison. Obama’s liberal accomplishments were forced upon him or he was embarrassed into it. The DADT repeal was forced because the Federal Judge had enough of the Pentagon and the Obama Administration promising widespread chaos if it was repealed without providing evidence, and the whole support of gay marriage was weak sauce at best and the result of Biden embarrassing the President into doing the right thing after OFA refused to help against conservatives in North Carolina. The Lilly Bedletter Act was delayed, so the new Democratic President could sign it instead of W. who never vetoed anything.

          He’s a 90′s Republican.

    2. craazyman

      Yeah this is about the only time of year I wish I had a TV. Couldn’t believe the ‘Skins let RGIII bust his knee twice against Seattle, just incredible. And with Kirk Cousins a proven backup! They could have won! They should have won.

      Coach Shanahan is one of the DC boneheads too.

      I read that long article on Jacob Lew in Links. I may be naive, but I still think it’s possible these people are actually that stupid and delusional — to believe lack of regulation isn’t the problem. Just cause someone has a nice suit and a Big Title and went to Harvard or Georgetown or wherever, it doesn’t mean they’re not a total moron.

      Some folks will say that’s just a front, just a mask so the hand goes deeper in our pockets. The Big Lie to grease the crime. That may be. Maybe it’s both. I don’t know.

      These same people, who mutter and stammer that lack of regulation is, uh, wouldn’t have mattered, uh, no, see Lehman this and AIG that, uh duh . . . They would never say about football: “Take the refs out of the game and let the players play!” “There’s too many rules.” “Regulation is killing the sport.”

      They’d never say that. In fact, they agree when the league tightens the rules so the quarterback doesn’t get killed and the punter doesn’t get flattened with his leg in the air. They see the logic there. They know the players will do anything, even sometimes when they know it’ll cost the team. The bonehead penalties you see. Incredible. Some moron takes off his helmet and starts trash talking and it’s 15 yards. Boom.

      But when it comes to banks. Uh , well, uh, if you look at Lehman and AIG, uh, well, uh, it’s not like it was in the 30s, uh, duh uh duh duh bla bla buh duh.

      1. jurisV

        I like you Mr Craazyman -

        You just hit a home run on the regulation game — or was it a 110 yd kickoff return for a touchdown?

        I love your sports example of regulation! I think that this last year’s NFL owner’s lockout of the referees over a labor dispute proved conclusively that the public totally understands the need for proper regulation. The example of sub-standard regulators (referees) drove the NFL fans, including me, to the “pitchforks and torches” mode. Human beings understand viscerally the necessity of a fair playing field.

        In the ongoing drama of smoking/burning batteries on the Boeing 787 the attention is all on the experts and the regulators with a lot of hoping and praying that these aircraft referees will come up with a sensible solution. Would anyone with any sense at all get on an aircraft that had been built and is being flown without having any unbiased Government regulators overseeing the process??

        I retired from an aircraft engineering business and I have all the respect in the world for FAA regulators and the first team NFL referees — and appreciate the necessity for REAL regulation/oversight by government over our “capitalistic” business and financial enterprises.

        If regulation is important for SPORTS games, it’s certainly necessary for Real World GAMES in finance and business.

        1. Aquifer

          ” …that the public totally understands the need for proper regulation. The example of sub-standard regulators (referees) drove the NFL fans, including me, to the “pitchforks and torches” mode.”

          Now if we could only get the public as involved in politics as they are in football …

      2. jake chase

        They are not stupid or delusional; they are sociopathic. They understand their role in the game and the inevitable outcome FOR THEM if they play ball (and if they don’t play ball). Other than holding their feet to the fire (and making relentless fun of them) there is nothing the powerless can do about this.

  3. denim

    The “Conservatives” with multimillion dollar salaries and bonuses will have a hard time selling us on
    austerity for us, but not for them. They get their “entitlements” from their board of director’s
    diverting company profits to them while we get ours from payroll taxes we pay while working.

    1. lucky

      That’s why they’ve worked so hard marketing themselves as the creators and producers, and the rest of us as the users and takers.

  4. jennifer hill

    It will be difficult to get these cuts done. Obvious to many is that what sounded good in 2010 (Bowles Simpson) is considered untenable by the public today. But the public is distracted by guns momentarily.
    What will become a reality is that everyone will have 2% less to spend and so everyone will spend 2% less. Marketwatch is already making reference to the payroll tax hurdle for stocks. Stocks? People will buy less food, energy and stuff they need to live and that will affect the local economies that are already struggling. Did Corporations factor this into their plans? Will less demand mean the creation of even fewer jobs?
    I doubt the Dems will have much of an appetite for real austerity in the near future. The winds of change seem to be blowing much of the austerity smoke back into the faces of the Republicans. They will be stumbling around for a moment before they regain their former bluster.
    Perhaps we can avoid any real austerity if cooler heads prevail.

    1. danny

      Doesn’t supply and demand theory work anymore?

      I.e. less demand = lower prices?

      Would that not mean we will but the same things?

      1. Nathanael

        Not with businesses who are both incompetent and monopolistic. Less demand? We’ll keep prices high, why not, we can! Less sales? Oh well, raise prices to make the quarterly numbers!

        Yes, this is a death spiral, but it’s perfectly typical for large corporations these days.

        1. danny

          Are you serious?

          Than why are laptops 50 – 70% cheaper than a few years ago. They can too – no…

          Lame excuses…

    2. danny

      Also,

      Which planet are people living on. The debt ceiling has been raised and will be raised again. The politicians could care less if the dollar collapses tomorrow. The socialists also could care less.

      The cliff was nothing but a big act to act like they care about the currency. Every single spending plan has been approved by the hop every single time..

      Cooler heads? There are only empty ones left. We’ve been trying the same game for 40 years yet think more of it is the solution, while unemployment hovers at high levels. How about this..capping the ceiling and forcing the reckless spenders to stop throwing our money down a eat hole. How’s that for cooler?

      Let me remind you that only a tiny fraction works in your public industry. Those not in your industry and following have been conned.

    3. Aquifer

      Well yes – the big meme of the day, month, year is that folks are poorer because of that big bad payroll tax … that seems to have taken the place on the target range instead of – the corps who are amassing record profits at the expense of those same workers – the fact that workers have gotten less and less a share of productivity for the last, what, 30 years …

      No, no – it can’t be that, it must be that big bad payroll tax – the implication being that, if we want to “restore” prosperity, if we want to put more money in folks pockets, the answer is NOT, a public jobs program, nor raising the minimum wage – no, the answer is keep whacking the payroll tax …

      Lordy, doesn’t anybody else out there think this is a bit, hmmm, shall we say, suspect, in light of what we all know both parties want to do to SS/Med?

      1. danny

        Lol,

        This shows why we are in trouble. Do you eat more money, do you wear more money, do you live in money or maybe you drive it.

        I know nobody on the board is that dumb. More food, more homes, more clothing, more cars is what makes us al wealthier. Supply and demand says so.

        But who wants to work to increase the supply of those? Anyone.., i bet nobody votes for working on this board.

  5. danny

    I hope these are jokes. The rich people run the gov and you not only want the gov to run for the small guy, you want the gov to take their money.

    What world do we have today? Can anyone reason?

    How about asking for fairness?

    From here, it looks like neither the rich not the socialists want fairness. I see rich leech and socialist leech eating the same host. Don’t act like you care.

    1. citalopram

      Socialists aren’t in power in the U.S., Danny boy. They have never come close to being in power. It’s always been the rich eating out lunch. The amount of thievery that these rich guys have perpetrated on the American People dwarfs any welfare check that’s cut.

      1. Susan the other

        The iconography of “Dr. Strangelove” is as relevant today as it was in 1960. Major Kong is the parable and the perennial underlying message is “keep your powder dry.” To wit: the curious Koch brothers and the debt ceiling. The (undeclared) war in the middle east (and Africa) has now gone on much longer than we could/can afford under our normal “debt ceiling” hypocrisy. Therefore the Kochs send out an edict to their rabble to cool it because the cost of war will overwhelm any pretense at fiscal responsibility and bring about an austerity that amounts to American destitution… and the war? We will lose not just the war, we will lose America. To impose austerity will bring a rapid end to our financial “system.” Like Japan losing her entire export market. So naturally the debt ceiling rhetoric must become muted and thus the war effort can go on and on like a chronic illness.

        1. JustMeAgaiN

          Well, but “the threat” lives on, and therein lies its value. Always(?) narrowly averted, but always a horrific specter, nonetheless.

      2. danny

        The majority is socialist now days. As a society, we are lazy and dumb. We want more wealth for sitting on our assess. We want freedom, liberty, security, guaranteed jobs all via the government..

        I sure am glad i am not in the socialist camp.

        1. sharonsj

          If the majority of us were Socialists, and if we actually ran the government, we’d have a national health care system, you twit.

  6. JDJ

    The Constitution says that compensation of members of Congress cannot be changed until an election has intervened. Wonder if deferred payment can be seen as a ‘change” – making the stick in the offer more BS.

  7. Schofield

    Theater of the Absurd. A Congress full of politicians pretending to be responsible but virtually none of them having any kind of coherent view how modern money works! None can laugh though because of the unnecessary hardship this plague of Neo-Liberals have and will be further imposing upon the many.

  8. Andrew Gallagher

    I don’t think this rump Rep. House is terribly interested in slashing entitlements. That’s the bailiwick of wall street centrist types (I.e. the entire Democratic party and a very narrow band of “serious” Republicans like Paul Ryan). It’s been rank and file House Republicans that have been keeping granny out of the cat food aisle. Game over.

    1. scraping_by

      Er?

      Spending cuts proposed by Boehner and crew are normally vague, but tend toward domestic programs. Infrastructure, health and welfare, quality of life are apparently sinful practice that will doom our nation to Hell.

      Social Security is not an entitlement (look up the legal definition) but it’s still mentioned by every deficit hysteric on every news program they get on. And they are the source of deficit hysteria.

      Recasting flagrant antigovernment terrorists (as opposed to closeted antigovernment terrorists) as defenders of the common folk is Milo Minderbender territory.

      1. Andrew Gallagher

        House Republicans aren’t protecting granny out of principle, only insofar as they don’t want to give Obama some centrist handjob win while simultaneously cutting granny’s SS check. That’s the absolute worst possible political calculus if you’re a House Republican.

        1. Andrew Gallagher

          Which is to say, republicans want granny’s SS check, but they want only the democrats to own it. Rest assured, had the Democrats maintained their supermajority and the country not fallen into Great Depression II, SS would likely be adjusted to Chained CPI by now.

  9. scraping_by

    I’m encouraged we’re still worth bamboozling.

    The script for future financial issues has been set: R’s huff and grump and threaten, Barry mumbles and sniffs and says things that can be sliced into reasonable, and in the end, in a last minute rush, they do their rich masters’ bidding. See the Bush/Obama tax cuts for the wealthy at the turn of the year.

    Alongside the normal distraction, which has lately been far too many fallen athletes and not enough entertainers with large breasts, the public face of Wall Street greed will continue the public act of conflict while in the end, less blatant, deals are presented which make the majority poorer and the rich richer. Again and again.

    In the light, the actors preen and posture. In the dark, the rats are at the seed corn.

  10. jsmith

    Couldn’t find a working link but for some sad hilarity as to the fact that time in the Spectacle stands still:

    The Globe and Mail, Oct 31. 1989 via Lexis/Nexis

    Byline: KENNETH N. GILPIN

    For much of the 1980s, official Washington has chosen a dubious milestone – a necessary increase in the nation’s debt ceiling – as the appropriate moment to call a political scrimmage.

    The tactic has grown tiresome to credit market participants, who warn that the latest upshot could be disarray, and possibly higher interest rates, over the next few weeks.

    As a way of trying to make political points, Democrats in Congress have in the past delayed passage of a rise in the debt ceiling as a way of reminding voters that the huge increase in the national debt this decade has taken place with Republicans in the White House.

    The partisan battle took on a new twist last week, when Republicans made it plain that they intend to attach a rider, designed to cut the capital gains tax, to legislation that raises the debt ceiling, now at $2.87-trillion (U.S.).

    snip

    The Treasury’s decision was not greeted with universal derision, however.

    ‘I am not sure there would have been a timely vote on the debt ceiling even without the capital gains provision,’ said Lawrence Kudlow, chief economist at Bear Stearns & Co., who was chief economist at the Office of Management and Budget during the first Reagan administration.

    ‘Treasury’s step was somewhat unusual, but it seems prudent,’ Mr. Kudlow said.

      1. jsmith

        You might also enjoy this:

        http://en.wikipedia.org/wiki/Lawrence_Kudlow

        Kudlow graduated from University of Rochester in Rochester, New York with a degree in history in 1969.[3] Known as “Kuddles” to friends, he was a star on the tennis team and a member of the left-wing SDS (Students for a Democratic Society) at Rochester. In 1970, Kudlow joined Joseph Duffey’s “New Politics” senatorial campaign in Connecticut. Duffey was a leading anti-war politician during the Vietnam war era. Kudlow, working with Yale student Bill Clinton as well as many other rising young Democrats, was known as a “brilliant” district coordinator. In 1971, Kudlow attended Princeton University’s Woodrow Wilson School of Public and International Affairs, where he studied politics and economics.

        snip

        In 1987 Kudlow was rehired by Bear Stearns as its chief economist and senior managing director. He was fired in 1994 after abuse of cocaine caused him to skip an important client presentation.[9] Kudlow also served as an economic counsel to A. B. Laffer & Associates, the San Diego, California, company owned by Arthur Laffer, a major supply-side economist and creator of the Laffer curve, an economic theory tying lower taxation levels to increased government revenues, at least at some taxation rates.

        He was a member of the board of directors of Empower America, a supply-side economics organization founded in 1993 and merged in 2004 with the Citizens for a Sound Economy to form FreedomWorks. Kudlow is also consulting chief economist for American Skandia Life Assurance, Inc., in Connecticut, a subsidiary of insurance giant Prudential Financial.

  11. docG

    What’s needed is a comprehensive jobs program. Paid for by the (re)institution of a meaningfully progressive taxation system, i.e., progressive taxation of all forms of income, including Soc. Sec. and Medicare taxes, PLUS a windfall profits tax PLUS a wealth tax. If Obama were truly the force for change he’s claimed to be, this is what he’d be fighting for. Instead, he’s piddling around with a rear guard action that will, at best, protect Americans from only the most extreme Tea Party policies. His endorsement of the Bush tax cuts was already a huge capitulation.

    Frankly, I’d rather see the debt ceiling not be raised, and the financial system go down in flames then see this country trash its social safety net while .1% of the population are awash in unearned, undeserved wealth, the like of which has never before been seen in history. Wealth that’s largely immune from meaningful taxation, even after the wonderful “deal” Obama thinks he cut to avoid that phoney fiscal cliff.

    A systemic collapse will erase a large chunk of that ill gotten wealth and take this country a long way in the direction of economic equality.

    1. Aquifer

      doc – hmmm, sounds like a rather sadistic solution to me – think i’ll pass on that one – too much “collateral damage” …

      1. Nathanael

        In fact, systemic collapse is coming, pretty much guaranteed. I spend my time discussing the question of what we *should* do in hopes that after the collapse we can build *better* institutions which do the *right* thing.

        Because we could easily build worse institutions that do even stupider things.

        1. kris

          Hah, never thought this perspective.

          Destroy bad institutions and…built worse ones. That’s new to me. Something to think about.

          1. different clue

            That’s what happened in post Soviet Russia. The “A-Team” communists foresaw the collapse and positioned themselves to piratize (Yeltsinize) all worthwhile public assets with the withering-away of the Soviet State. Yeltsinization was in fact a perfect demonstration of Anarchism On Parade. The “B-Team” communists were left to nourish their nostalgia and run their pathetic leader Zhyuganov in elections about preventing ( or now reversing?)
            Yeltsinization.

            Smash the State? Prepare for private rule by the OverClass Anarchist Elite to follow . . . even more so than now. Now they are just “attriting” and “withering-away” the State from within.

  12. kris

    This is an outstanding analysis.

    Remembering the blog about the best blogs where NC was like the 7th or something, question:

    Why would you guys compare yourself to pure crap like calculated risk or others?

    I’ve read so much that I’ve concluded that only 3 are worth a daily read on earth:
    - FT Alphaville
    - Zerohedge
    - Naked Capitalism

    The rest are simply followers, few good followers few really bad ones.

  13. jstuart902

    Disagree with most of the assumptions and some of the implied conclusions. Will not present arguments, just predictions:

    1. Obama may accept a clean 90 day extension of the debt ceiling, but not one with conditions (need a budget or no congressional pay). Reid may well stop the conditional proposal in the Senate. Obama will do this (if he does) simply to change the sequence order of the fiscal battles. When the debt ceiling comes up again in 90 days, he will not negotiate, nor will he accept another short term extension. The GOP will give him a longer term clean extension, or Obama will let them take the country into default.

    2. Obama will let the sequester trigger if he can’t get a “balanced” (revenues combined with cuts) deal he likes. It is possible Obama will trade a move to chained CPI on Social Security and/or an increase in the Medicare age in exchange for new loophole closing tax revenues as part of tax reform.

    3. There will be no other reductions of healthcare or pension benefits for the 98% now, or for the rest of Obama’s second term.

    4. Obama does have a very specific target for total deficit reduction: $4 Trillion over 10 years. The Center for Budget and Policy Priorities recently put out a report saying that $1.2 Trillion more policy cuts (size of the sequester), when combined with interest savings, will bring us to the $4 Trillion over 10 years and a stable debt/GDP ratio of 73% (http://www.cbpp.org/cms/index.cfm?fa=view&id=3885). This is what Obama is shooting for.

    5. When the $4 Trillion is in place, he will say: “We’re done. Time for growth.” And he will refuse any further budget cuts, and will not negotiate when future deadlines arrive.

    6. Assuming Obama gets $400B in new tax revenues in this round, the total deficit reduction package will have $1 Trillion in high end tax increases, $1.2 Trillion in BCA cuts due to imposed caps on discretionary spending, $800B in revised sequester cuts (probably half defense and half healthcare provider cuts), $400B in war savings, and $600B in interest savings. Other than a possible chained CPI for Social Security and an increase in the Medicare eligibility age, none of this affects healthcare or pension benefits or any of the mandatory health, food, and income supports for the needy.

    Endnote: Obama does not want to restructure Social Security. He believes the way to solve the healthcare budget dilemma is to get healthcare costs under control (which ACA appears to be doing); and therefore Medicare benefit reductions are/will be unnecessary. Obama became a deficit cutter after the 2010 midterms, when the GOP madness escalated. By May 1, the $4 Trillion deficit reduction over 10 years will have been put in place. CBO will be able to forecast that Debt/GDP will stabilize by the end of the decade. By May 1, budget/benefit cuts will have been credibly taken off the table.

    1. JustMeAgaiN

      5. When the $4 Trillion is in place, he will say: “We’re done. Time for growth.” And he will refuse any further budget cuts, and will not negotiate when future deadlines arrive.

      What then, when no growth arrives right on schedule? Time to turn it over to his right wing “base” again, as planned all along?

      Bottom line, “growth” is a dead horse from here on out, no matter how much you flog it. What, pray tell, then? Let me guess. The press (currency wise) or the press (people wise). One way or another, something’s about to give, and something tells me most of us ain’t gonna like it one bit!

      1. JustMeAgaiN

        5. When the $4 Trillion is in place, he will say: “We’re done. Time for growth.” And he will refuse any further budget cuts, and will not negotiate when future deadlines arrive.

        Might add, mighty magnanimous of his holiness, what with being a two term Prez and all. Remind me once again, with “friends” like these, just WinTF are we all in fear of our so-called conservative “enemies” in the first place?

    2. scraping_by

      Thanks for the official caption list to this cartoon. However,

      1. This is the same Barry who demanded the expiration of the Bush tax cut? Refusing this, demanding that, not negotiating the other?

      The official evasion has always been that he’s timid, overwhelmed, inept, and just a little bit stupid. Please stick with that one. This new dynamic Barry manfully struggling is too much of a joke, and not a funny one.

      2. The sequester is aimed squarely at domestic spending, keeping the nation mired in recession by cutting off the sort of middle class spending it’s built on. Extras like food and shelter. Putting government workers among the unemployed, making sure no business has any customers.
      Since the budget deficit is unrelated to SS , benefit cuts are not fiscal responsibility, they’re just scalp hunting.

      Listening to Barry call SS benefits “entitlements” betrays his goals.

      And loophole closing is a smokescreen, since the big evasions like offshoring are never discussed. So he’s going after the tuition deduction in exchange for bankrupting more seniors. Goody.

      3. Again, remember adamant Barry allowing the Bush tax cut to morph into the Bush/Obama tax cut? It’s really the 1%/Wall Street tax cut, but never mind.

      4. The deficit is a creature of the recession, not of out of control spending. Period.
      http://backtofullemployment.org/2013/01/15/a-modest-proposal-for-jacob-lew-acknowledge-three-simple-facts-about-u-s-fiscal-reality/

      This ‘target’ will perpetuate the recession, which may be the point. I know it’s always been GOP doctrine to take money away from the undeserving workers and give it to the saintly rich. Keeping the majority mired in double digit unemployment will keep all that lovely money out of their dirty hands.

      5. Even if newly untimid Barry would say ‘We’re done’ his bosses might not be.

      6. More revenue? Don’t assume the wealthy will suddenly lose interest in protecting their lofty status and allow more tax revenue. That’s pretty much all they have to do, and they can pay people to pay attention for them.

      That aside, the numbers so confidently thrown around are bogus on the face. There will never be defense cuts except for the pay and medical benefits of the uniformed services. No pointless WWIII weapon systems will be ended, no foreign bases will be closed, no opportunity for killing Muslims will be passed up. The First Gay President will never allow himself to be soft on defense.

      The interest savings are only if the only customer for Treasuries is the Fed. And while it’s true the interest gets refunded to the Treasury, how about the principle? That we can only get back if we nationalize the Fed.

      Healthcare provider cuts? Haven’t we already noted that the deficit is in the general fund (financing by income taxes) and not the social insurance funds (by FICA)? Using deficit hysteria to hunt scalps.

      All this technospeak may impress Washington insiders, but in the end, Barry’s a lackey. No one’s reassured that the lackey’s masters don’t want the SS trust fund, or to impoverish the middle class, or just to be pricks because they can be. That’s what being the 1% is all about, and their sock puppets will do the dance.

      1. LucyLulu

        “The deficit is a creature of the recession, not of out of control spending. Period.”

        Revenue is definitely down. During the Clinton surplus years, revenues were running from 19% to over 20% of GDP. The historical average since WWII has been a little over 18%. In 2009 and 2010, the government collected 15.1% of GDP. By 2012, it had climbed to only 15.8%. So, reduced revenues, whether from the poor economy or Bush tax cuts, can account for roughly $500B of our current deficit, but not all.

        We have also increased spending, though necessarily, as a result of the recession. Social program spending has increased. Unemployment benefits, food stamps, medicaid expenses have all increased. People have opted to collect their SS benefits early at 62 due to lack of employment. All financial crises followed by recessions historically have resulted in spikes in deficit spending. Its unrealistic to expect otherwise.

        Agreed that a healthy economy with full employment is the solution. The financial sector is doing well (JPM reported 55% growth in earnings). Unfortunately, as Keen says, the finance sector encourages debt that finances speculation on asset prices instead of funding investment in the production of real assets. This is the kind of investment that resulted from the money freed up by cutting taxes on the wealthy, corporate tax savings, and QEx and it hasn’t lead to higher rates of production/employment….. only inflated prices of existing assets.

      2. kris

        You made me laugh.
        You write as if Obama understands economics.
        HAHAHAHAHA.

        He’s clueless. The question is who’s playing the wires behind him.

  14. LucyLulu

    Paul Ryan has become the new leader of the Tea Party fiscal responsibility commission. There isn’t a budget-busting bill under GW he didn’t vote for. The Paul Ryan Budget didn’t “balance the budget” until 2040, kept defense spending intact, and basically cut only social programs. It lowered corporate and top tax rates and required about $500B of savings from eliminations of tax deductions he never specified other than stating he would “broaden the base”. The last Congress, other than to vote to cut funding for such programs as NPR, planned parenthood, which are trivial in terms of deficit spending, and voting to repeal Obamacare 37 times, they voted for every bill that increased appropriations.

    In other words, what they say and what they do are two different things. They say they want to balance the budget and pay down the debt, but they spend just as much money as the Democrats. They merely want to distribute who gets the money in different ways. Neither side really cares about the deficit or the debt. What the Republicans want, and especially the more conservative ones, is to gut Social Security and Medicare. Unfortunately, Obama has always fallen into this group and now some of the moderate Democrats have signed on as well.

    1. JustMeAgaiN

      Answer: vote Republican if you bother to vote at all. Better the devil you know and can depend on… That’s been the “secret” to their success so far, and it’s a good one.

      Democrats = professional subterfuge

      Better yet, just say NO!

  15. LucyLulu

    Extending the debt ceiling for three months is not a good move for those who want to preserve the social safety net or want fiscal stimulus spending.

    What the anti-austerity folks have working for them right now is the momentum from the election. The people demonstrated clearly that they don’t back cutting SS and Medicare and Obama seems to have temporarily backed off. The conservatives have lost credibility with their various displays of outright craziness. However the people have short memories. Kicking the can for three months puts this off to a time when the momentum will likely be lost. The Republicans may well get their act together between now and then. In three months, resistance to the cuts to SS and Medicare may well have dropped off.

    Notice that OFA’s focus is going to be on gun violence, climate change, and immigration. No mention of the economy, infrastructure, or jobs. We’ll be copying the fiscal policies of the economies of continental Europe, ignoring that they are all tanking, while socialist Scandinavian economies (and even Keynesian Chile) have weathered the GFC well and are flourishing.

    1. GDC707

      Absolutely. I can always tell what OFA’s proscribed talking points are by the postings of just 3 of my FB friends. Right now they are all about GUNS, GUNS, GUNS, a little climate change and a bit more immigration. But fascinatingly, although these FB “friends” of mine don’t know each other, their posts parallel almost perfectly. Obviously, they all get the same memos from the same source. Simple tools. Every one of them.

  16. slobo

    Cracks me up how your cherished American freedom effortlessly limits public discourse to several slightly different ways to fuck you. In countries that the kleptocrats haven’t sewn up yet, actual conflict occurs, out in public. Slovenia got infected with foreign property speculation much as Spain did (the contagion came mainly from Italy and Austria). But in Slovenia the state is still struggling to make the people pay for bankers’ crimes. The courts are forced to babble embarrassing nonsense to thwart direct expression of the popular will. Crooked judges are constrained to pay incoherent lip service to human rights, opening the door for objective review in international fora. The Eurocrats may get their way, but the Slovenes are not going quietly. Watch and learn, American yokels, this is how the free world fights the Bank Reich.

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