Paul Krugman: The President Surrenders

Discussion in 'Politics' started by Lakhota, Aug 1, 2011.

  1. Lakhota
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    Lakhota Diamond Member

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    A deal to raise the federal debt ceiling is in the works. If it goes through, many commentators will declare that disaster was avoided. But they will be wrong.

    For the deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status.

    Start with the economics. We currently have a deeply depressed economy. We will almost certainly continue to have a depressed economy all through next year. And we will probably have a depressed economy through 2013 as well, if not beyond.

    The worst thing you can do in these circumstances is slash government spending, since that will depress the economy even further. Pay no attention to those who invoke the confidence fairy, claiming that tough action on the budget will reassure businesses and consumers, leading them to spend more. It doesn’t work that way, a fact confirmed by many studies of the historical record.

    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.

    And then there are the reported terms of the deal, which amount to an abject surrender on the part of the president. First, there will be big spending cuts, with no increase in revenue. Then a panel will make recommendations for further deficit reduction — and if these recommendations aren’t accepted, there will be more spending cuts.

    More: The President Surrenders

    I totally agree with Mr. Krugman! Obama is probably the world's worst negotiator! He has totally played into the hands of the radical right wingnuts whose sole purpose is to hold America hostage to prevent Obama from being reelected. Wingnut agenda first - America second.
     
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  2. Lakhota
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    Lakhota Diamond Member

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    [​IMG]
     
  3. Avatar4321
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    Avatar4321 Diamond Member Gold Supporting Member

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    The President is getting what he wants. The debt ceiling is going off. and all he has given is promises that will never be upheld by the Congress.

    Ironically, by getting his victory here he has proven that he is a failure of a leader, per his own standard.
     
  4. Political Junky
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    Political Junky Gold Member

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    Hoover cut spending too and look what happened in 1929.
    FDR, Truman, and Eisenhower increased federal spending and America flourished.
     
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  5. Lakhota
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    Lakhota Diamond Member

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    Question: What started the Tea Party?

    Answer: A Black President.
     
  6. Flopper
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    Flopper Gold Member

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    I think the Democrats may have lost the battle, but not war. This is only the first battle in a long war of ideologies.
     
  7. tinydancer
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    tinydancer Diamond Member

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    Surely you jest.
     
  8. ba1614
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    ba1614 Silver Member

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    lol, when the liberal economist falls flat on his face, again, use the classic liberal fallback, race.:clap2:
     
  9. JoeB131
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    JoeB131 Diamond Member

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    No, an incompetent president who misjudged what his mandate was.

    Now, I know you want to believe that this is about race, and when Obama gets voted out next year in a 49 state loss, you can blame mean old racism, but the fact is, he was done in by his own arrogance.

    He forced a health-care reform plan the people didn't want. When even liberal Massachusetts gave Ted Kennedy's seat to a Republican with the express purpose of stopping it, he used a parlimentary manuever to shove it down our throats, anyway.

    He carped about Bush's economy, but gave us one that was far worse. He whined about the wars and started another one.
     
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  10. sparky
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    sparky VIP Member

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    that platinum solution is looking better by the hour......
     

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