Friday, July 15, 2011

Breaking Down The Administration's Debt Ceiling BS

So even after being gifted an exit plan, the Obama seems committed to finding a much, much shittier deal.

This has obviously led to some concern among sane people who think that austerity is a good way to hurt the economy, not improve it. The administration has attempted some push back on this, and from what I can tell leaked their talking points/reasoning to Ezra Klein. Lets deconstruct:
You can’t spend till you cut: The deficit is sucking the oxygen out of everything else in Washington. It isn’t just powerful as an issue in and of itself, but as a response to any significant investments the administration might propose. If you believe we need to do more on jobs, or more on anything, you need finish the deficit conversation. And as an added bonus, if you finish the deficit conversation in a way that convinces the American people you’ve made sacrifices and forced government to live within its means, you have, at least in theory, more credibility when proposing new initiatives that would expand the size of government again.
The deficit is sucking the oxygen out of Washington... in large part because the White House embraced this bullshit for the past 2+ years! One of the few things the president can control is the nature of the discussion, and they've used it to amplify a conservative frame on budget cuts. I appreciate the thought that once the deficits are "done" you can "pivot" to something else, but I'm not exactly optimistic about what this White House will "pivot" to. They've shown no interest in anything even remotely close to what needs to be done about our unemployment rate, and if you actually cared about that, you probably wouldn't have spent two years focusing on a made up problem.

If you're going to talk about unemployment and how the government can create jobs after this deal is done, then great, but you've ruined any chance of that working over the last two years. If you get this passed and start talking about the next corporate friendly beltway approved topics like free trade deals and corporate tax holidays... that sounds a bit closer to Obama's comfort zone.
It’s your only shot at stimulus: A big deficit deal could include mild stimulative measures such as unemployment insurance and an extension of the payroll tax cut. That’s not much, but it’s better than nothing. A small deficit deal, or no deficit deal, won’t include any extensions of stimulus.
This is the classic hostage argument. If we need to cut social security and medicare to get an extension of unemployment insurance, than things are much worse than we thought. Somehow I don't think that's the case. Another way of looking at things: Instead of getting in the grand bargain framework to begin with, how about you just spend your time campaigning for unemployment insurance and for congress to pass more stimulative measures? It may not work, but it's also more productive than campaigning for cuts that will hurt the economy!
It’s a way to control the timing: If you strike a deal that lasts 10 years, you can backload the savings to protect the recovery over the next three or four years. If you don’t strike a deal, Republicans are likely to take out their frustrations on the 2012 appropriations, which is to say we won’t have much long-term deficit reduction, which most economists think we need, but we’ll have a lot of immediate austerity, which most economists think would be poison for the recovery. It’s the worst of both worlds.
Breaking: The Republicans will "take out their frustrations on the 2012 appropriations" no matter what the fuck we do now. This is probably the most insane idea in this list. The White House seems to believe that if we make a deal on all this stuff now, it will magically go away for future fights.

Newsflash: The Republicans don't believe in Social Security. Or Medicare. Or any part of the federal government that isn't corporate subsidies or defense spending. It will always be on the table because THEY DON'T GIVE A FUCK ABOUT THE DEFICIT. They never have, all they want to do is cut and destroy until they're nothing left.
Getting Obama reelected is important: The White House believes striking a major deficit deal would be good for Obama’s reelection chances. They also believe that getting Obama reelected would be good for the priorities that Democrats care about. President Mitt Romney’s spending cuts would be worse than theirs, his hostility to taxes would be more implacable than theirs, and he’d repeal or hollow out both the health-care law and financial regulation.
Would getting a second term from Obama be better than anything from President Romney or Bachmann?


Is President Obama introducing the idea of cutting Social Security and Medicare during these negotiations?

Yes, yes he is.

So maybe now is not the right time to make the "he's better than the alternative argument", because it would be a hell of a lot harder for a Republican president to pass Social Security and Medicare cuts, than it would be for Obama to do what he's attempting to do right now.
Deficit reduction is good economic policy, both now and later: There’s something close to a consensus view that we need deficit reduction within the next five to 10 years or the odds of the market turning on us rise to unacceptable levels. But many in the White House also believe that a credible commitment to deficit reduction in the long and medium term could help the economy in the short term. In his July 2 radio address, for instance, Obama said, “Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.”
This graph (and report) :

There is no "deficit crisis". 100% made up. You know what a real problem is? Mass unemployment as a result of the resession. Do you know how we could fix the deficit? Giving those people jobs again, so they are paying taxes again and miracelously... no more deficit.

If these talking points are a window into the Administrations' thinking... then dear god. Not only have they attached themselves to junk economics as their sole policy goal, but they are either lying about "using this to pivot to something else" argument, or are complete morons. I'm going to go with the former, but that doesn't really make it any better.

With our Democratic President this commited to job killing austerity, it's a good thing we have am unreasonable lunatic (Eric Cantor) and a wall street whore (Mitch McConnell) running the negotiations from the other side. If it weren't for Cantor's insane demands and McConnell's strong desire to raise the debt ceiling, we would have already lost by now.

So come on Eric, you know you're a big enough asshole to turn down any deal that Obama gives you, no matter how many Medicare cuts and Bush Tax cut extensions he puts in there!

Help us save our beloved social safety net programs that you don't believe in!

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