Cheap Suitcase Watch

We have a debt ceiling deal (OK, waddya mean "we", you country club Republican?) and the Times headlines provide a hint as to winners and losers.

From the Times editors:

To Escape Chaos, a Terrible Deal

From Prof. Krugman:

The President Surrenders

From Ross Douthat:

The Diminished President

And for balance, from Jeff Zeleney of the news desk:

After Protracted Fight, Both Sides Emerge Bruised

Both sides were bruised!  Of course,that could be said after every Super Bowl, despite the clear presence of a winner and a loser.

But let's be fair - Obama 2012 got the one thing they really wanted, which was a deadline extension past the election. Don't call his bluff!

WHO'S LAFFERING NOW?  Prof. Krigman wold never tolerate the suggeston that a short term tax cut could stimulate long term changes in spending or investment.  But on the spending side, he hints that more spending can be self-financing:

Indeed, slashing spending while the economy is depressed won’t even help the budget situation much, and might well make it worse. On one side, interest rates on federal borrowing are currently very low, so spending cuts now will do little to reduce future interest costs. On the other side, making the economy weaker now will also hurt its long-run prospects, which will in turn reduce future revenue. So those demanding spending cuts now are like medieval doctors who treated the sick by bleeding them, and thereby made them even sicker.

Well, if cutting spending is going to increase future deficits, doesn't it follow that raising spending would reduce future deficits?  Who is Laffering now?  Or is the professor prepared to insist that deficits are doomed to rise no matter whether government spending rises or falls?

My answer is that this is a trick question - placing the focus on the budget deficit itself, rather than the health of the economy, is a misdirection.  Higher spending should, in a Keynsian world, produce both higher deficits and a more robust economy.  Or, as a bonus answer, if the government spending had high social value (a cure for AIDS, or an end to obesity), then of course it could eventually pay for itself.

SEVEN-EIGHTHS OF A LOAF: Marc Thiessen congratulates the Tea Party and has some advice:

Now comes that hard part: accepting an incomplete victory. Some Tea Party Republicans will be unhappy with the deal because it does not include a balanced budget amendment to the Constitution. The fight for a balanced budget amendment must go on. But Tea Partyers should recognize just how much Obama and the Democrats caved: $2 trillion in spending cuts. No tax increases. A new precedent that debt-limit hikes must be accompanied by equal or greater cuts in spending. And the potential for a balanced budget in 10 years.  That the Tea Party accomplished all this in just six months — at a time when the GOP controls one-half of one-third of the federal government — is remarkable. 

The “hobbits” won.

Let's see if they think so. I am sort of resigned to a House rebellion today.

Comments

[Chubby]

((I guess the new term is teaparty terrorist))

Being as the Tea Party is mostly middle America, moms and pops, and grannies and gramps, I think that slander will fail bigtime.

[Ignatz]

--I guess the new term is teaparty terrorist.--

So because Gabby Giffords is ambulatory again militaristic hate speech is now perfectly acceptable again?
Does Nanny Barry approve?

[Melinda Romanoff]

CH-

I could only infer that Joel Segal is probably set.

[PD]

Militaristic hate speech in the pursuit of Tea Partiers is no vice.

[Clarice]

What about racist, sexist, homophobic terrorists??

[Sara (Pal2Pal)]

Mitt Romney:

While I appreciate the extraordinarily difficult situation President Obama’s lack of leadership has placed Republican Members of Congress in, I personally cannot support this deal....

As president, my plan would have produced a budget that was cut, capped and balanced — not one that opens the door to higher taxes and puts defense cuts on the table... President Obama’s leadership failure has pushed the economy to the brink at the eleventh hour and 59th minute.

[Agent J. (formally known as "J"..]

I am a Tea Party Terrorist (TPT2). 2nd level.I belong to two different programs..

Seeing Gabby Giffords back at work, that is good..Since she has survived a direct shot to the head, just where do you shoot a liberal to inflect a fatal blow?

[Janet]

The names just keep changin'....ignorant hicks, powerful rich whites,...now terrorists.

[JM Hanes]

Sara:

I'm not sure why a lot of folks are giving Romney hell for keeping his mouth shut during all these negotiations. Boehner and McConnell -- and their opposition members -- had more than enough on their plates without a lot of high profile, political back seat drivers passing judgment on every step and misstep along the way.

[Threadkiller]

Crossposting because that's how I role...

August 1, 2011 9:26 PM

August 1, 2011. This act increases the debt limit by between $2.1 and $2.4 trillion, the biggest explosion of debt in American history. It allows the government to avoid spending reductions for the next two years while squandering our last best hope of averting a sovereign debt crisis. I am opposed to this measure for the following reasons:

1. The purported cuts, even if realized, are far below the $4 trillion deficit reduction that credit rating agencies have warned is necessary to preserve the Triple-A credit rating of the United States Government.

2. It blows the lid off the House budget passed in April by more than a half-trillion dollars over ten years.

3. It makes no significant spending reductions for at least the next two years, essentially freezing spending at an unsustainable level. While the debt increase occurs this year, deficit reductions are to be spread over many years and could be reversed by future acts of Congress.

4. The spending caps are easily circumvented by declaring appropriations to be an emergency, a response to a “major disaster,” or necessary for the “Global War on Terror.”

5. The balanced budget amendment provisions are illusory because the amendment is completely undefined.

The House of Representatives voted on S. 365 – “Budget Control Act of 2011" on August 1, 2011. Congressman Tom Mcclintock voted NO.

[(Another) squaredance (FKA Another Barbara)]

I am a Tea Party Terrorist (TPT2)

I hope someone is working on the T-shirt as we speak.

[Captain Hate]

I'm not sure why a lot of folks are giving Romney hell for keeping his mouth shut during all these negotiations.

Really? As somebody who seemingly doesn't mind making a fool out of himself by issuing conflicting statements on whether carbon influences climate or nakedly pandering for ethanol, maybe Mitt could've said something similar to the quote above without his lack of support for the ultimate deal while negotiations were going on. Nothing that would've cut the legs off Boehner or McConnell; just giving pointed jabs to the party of the irresponsible.

I don't know if it was a smart thing to stay aloof from the fray while bidding to replace somebody whose interest in the matter was freeing himself up for his birthday party. Fortunately for him Michele Bachmann made an almost complete ass out of herself on Laura Ingraham's show in doing the almost impossible by irritating what ordinarily would have been a friendly questioner. My patience with Bachmann doing these unforced errors has reached the maximum; I wanted to like her but she just says too much dumb garbage to be taken seriously. Maybe she was expecting Tammy Bruce to be the hostess and she could lob grenades at Boehner and McConnell and not get called out on it (although Tammy considers her a stalking horse for Romney to keep Palin sidelined) but she erred badly in that regard. She's just another self-serving nut that Minnesota keeps inflicting on the body politic.

[mikey]

According to Michael Gerson, the Democrats will use the debt ceiling as a lever against future Republican Presidents. Could someone explain to me how the Party of Big Government will do this?

[sbw]

No, Mikey, you misheard that. The Democrats threatened to use the debt floor as a lever against future Republican presidents.