On the other side, President Obama with everything to lose, including the entire economy if the repugs won't raise the debt ceiling, and nothing to bargain with.
Here's his choice: Kill the New Deal and Great Society, or kill the entire economy. What do you think President No Liberal Principle Is Worth Standing Up For is going to do?
Ed Kilgore:
TNR’s Noam Scheiber probably reflects the current views of a majority of progressives in expressing less than total confidence in the president in this next war of nerves and threats and hostage-taking:
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.
Especially when the last-minute deal on revenue is entirely insufficient.
Kevin Drum:
And there's not much question we're going to need more revenue. I'll have more on this in a couple of days, but unless we want to abandon any pretense of decent care for the elderly—and we don't, no matter what Paul Ryan believes—we're going to need to raise substantially more tax revenue in the future. But if Republicans remain dead set against tax increases, and even Democrats are unwilling to raise taxes on the middle class, how is that going to happen? As things stand now, not only are tax increases on the middle class unthinkable, but Obama was even forced to cave in on the estate tax thanks to Democratic nervousness about offending the ultra-rich.
In one sense, I guess it's not worth borrowing trouble. If we're going to need more tax revenue in the future, let's deal with it in the future. Maybe political pressure will force Republicans to capitulate. Maybe Democrats will take over Congress. Maybe a latter-day John Galt will come along and invent a free energy machine and none of this will matter.
Still, over the next 20 years we're probably going to have to increase taxes by something like five points of GDP. That's an increase of nearly a third in the federal government's tax haul, and we just fought a battle royal just to get something like half a point of GDP. Eventually, something will have to give.
Jon Walker at Firedoglake cites Obama's own promise Tuesday that he will seek to cut the deficit, even though nothing could be worse for the economy.
Allison Kilkenny at The Nation:
Economist Dean Baker writes that this entire debate has been part of a larger distraction “at a time when by far the country’s most important problem remains the economic downturn caused by the collapse of the housing bubble.”
“The obsession with budget deficits is especially absurd because the enormous deficits of recent years are entirely the result of the economic downturn,” he writes at CNN.
Furthermore, profits have returned to prerecession levels. Bakers points to the Campaign to Fix the Debt, an organization comprised of many of the country's richest and most powerful CEOs that pushes the case for cutting Social Security and Medicare as well as lowering the corporate income tax rate.
SNIP
“CEOs from both political parties have openly come together to demand cuts in Social Security and Medicare, two programs that enjoy massive political support across the political spectrum,” Baker writes. “The wealthy are joining hands without regard to political affiliation to cut benefits that enjoy broad bipartisan support among everyone who is not rich.”That repug majority in the House revealed its true self in the refusal to hold a vote on emergency relief for victims of SuperStorm Sandy.
Baker reiterates that we dot not have a chronic deficit problem, and the big deficits are the results of a collapsed economy, which can only be fixed by the president and Congress supporting programs that will put people back to work and bring the economy back up to speed. The 99 percent having money to buy goods is the only way to get the economy rolling again, which won’t happen by Congress giving massive tax breaks to a handful of billionaires who don’t create jobs for anyone other than themselves when they create nefarious Fix the Debt committees.
In fact, Baker writes, it’s necessary for the government to run large deficits!
Ideally, the money would be spent in areas that will make us richer in the future: Education, infrastructure, research and development in clean energy, etc. There is just no way around a large role for the government given the economy’s current weakness.
Actually, that last point isn’t true. There is a way around that role, and that’s Boehner and Company’s plan: the anti-state—the resource vacuum that slashes earned benefits, worsens the recession and leads to infinitely more suffering for the 99 percent.
Boehner made his intentions clear following the fiscal cliff deal:
“The American people re-elected a Republican majority in the House, and we will use it in 2013 to hold the president accountable for the ‘balanced’ approach he promised, meaning significant spending cuts and reforms to the entitlement programs that are driving our country deeper and deeper into debt.”
As David Atkins writes:
Once again, we're confronted with a situation in which Democrats aren't willing to simply let the country go to hell in a handbasket, while Republicans are. That gives Republicans the advantage in any negotiation going forward until and unless Democrats make the necessary rules changes to prevent Republicans from operating a tyranny of the minority.And he warns:
Still, the thought of this Republican Congress negotiating with Grand Bargain-desperate Obama over the debt ceiling is a terrifying prospect. It's going to take massive progressive mobilization over the next two months to block the worst from happening.
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