Monday Open Thread

 

"Taken for a Fool" - The Strokes

I am afraid this pesky work thing is going to prevent my giving any kind of decent analysis of the debt deal.  I am not happy with the fact that we got to this point -- I think that the extension of the Bush tax cuts should have been leveraged to get a debt ceiling increase simultaneously and that many people made this point at the time -- and not thrilled with the outcome and less thrilled by the precedent.  For a balanced approach (to coin a phrase) to what was agreed to, I'd recommend this piece at TPM by Brian Beutler.  I think he's got it about right in terms of the degree to which this is a bad deal and some of the factors that may help mitigate it in the long run.  Jonathan Chait, at TNR, is a little more optimistic, although also disturbed by the precedent.       

And Kevin Drum goes a step further and attempts to war game out how the Bush tax cuts will then play out in 2012.  I'd be curious as to your reaction to this scenario -- what do you think happens with the Bush tax cuts if Obama is re-elected? 

Finally, Mitt "Profiles in Courage" Romney announces that he opposes the deal and would support only a bill that was "cut, capped, and balanced."   I am shocked that Mittens would pander to the worst that the GOP has to offer. 

What else is bugging you?

Update:  Oh I badly needed something to smile about and Tom Tomorrow supplied the goods.

Comments

[oddjob]

I am shocked that Mittens would pander to the worst that the GOP has to offer.

Don't you mean "shocked, shocked!" (in your best Claude Rains immitation)?

[Sir Charles]

oddjob,

But of course.

Check out the Tom Tomorrow cartoon I just posted. Funny stuff, as they say.

[low-tech cyclist]

I'd love to see a headline saying "President Capitulates to Terrorists." That would sum up everyone's role quite succinctly.

The meta-problem is that this is now one item in a potentially infinite sequence of GOP hostage-taking moments.

The question for Obama isn't how to get out of one hostage crisis with the minimum of damage; it's to minimize the damage over the length of the sequence.

Unfortunately, he's taking them one at a time.

Having failed to play hardball over the shutdown this spring, Obama's best options with the debt limit were to pull something audacious to essentially make the hostage disappear. He had several:

1) He could have declared the debt limit unconstitutional under the 14th Amendment.

A couple of quick comments here: (a) sure, I've read Tribe, but I don't see any answer to the points Balkin raises here. But the key thing is (b) right or wrong wouldn't matter much - it would be up to Congress to enforce their interpretation.

2) He could bring up the legal principle that in instances of conflicting legislation, the later legislation implicitly amends the earlier legislation. In this case, April's continuing resolution for FY 2011 would take precedence over the older debt ceiling law.

I'm sure there's a legal flaw somewhere in this logic, but again, this is strictly between the President and Congress.

3) Finally (and as far as I can tell, completely legally), there was the option of minting $100 billion (or $1 trillion, or whatever) platinum coins.

Instead, Obama took all these options off the table, which put him in the position of being desperate for some deal, any deal. It's really hard to get a good deal when you believe you absolutely, positively must have a deal, and the other guy's willing to walk away from the table.

There are times for taking paths of dubious but semi-arguable legality, and as far as I'm concerned, this was such a time. If you aren't going to do it now, then when?

Oh yeah: to keep the planes flying over Libya. That's when.

[Davis X. Machina]

If I'm The Market, and I'm assessing the creditworthiness of the US, there's one underlying problem with all three of those scenarios is that they're unusual, untested, and not guaranteed to work.

The alternative -- paying the ransom -- is guaranteed to work. And because I'm the Market, I don't really care about the consequences.

I don't mind, really, if you pay your mortgage with gold bars that a little man spins for you out of straw every night -- the mortgage is paid.

But if you try to refinance, and your application package is largely based on that strange little man, well, then I might mind.

[Paula B]

Tom T's cartoon is hilarious, but did you notice the book advertised in the right-hand column of the blog page: http://bit.ly/rmmxBb

Says it all. For only $24.95.

[oddjob]

Passage of debt deal through House is by no means clear.

[joel hanes]

what do you think happens with the Bush tax cuts if Obama is re-elected?

Obama and the Dems will cave yet again, and the cuts will be extended indefinitely; even the complete elimination of the estate tax will continue.

But I'm no longer giving Obama a greater than even chance of re-election. This "deal" is a political disaster.

[Sir Charles]

oddjob,

Interesting. I guess Pelosi is not interested in pushing this one through.

joel,

I think the Bush cuts will end up being repealed when Obama can't get a buy in from the GOP to only extend them to those making less than $250,000.

But we shall see.

Re-election remains perilous, although there is the advantage that the Republicans have to nominate somebody. I would still put my money on Obama, but it could be very difficult if unemployment remains at 9%.

[Davis X. Machina]

It's Boehner's to whip. Money bills originate in the House. He's the Speaker of the House.

It's his job, not Pelosi's. (Her vote is certain, btw.)

[joel hanes]

I think the state and county and municipal spending cuts already in the works will push nominal unemployment above 10% by Nov 2012, with the real unemployment rate somewhere well north of 20%.

I see nothing in this deal that will increase demand, and several features that will allow the Teahadis to take hostages in subsequent budget and appropriations negotiations and do further damage.

[Sir Charles]

DXM,

Agreed with you on this -- I am actually a little surprised that Pelosi announced her intentions at this point. It must be a bitter pill for her, but she's a good soldier.

jh,

I fear we are going to be ever more dependent on the confidence fairy. I don't know what the hell else is going to drive demand.

[Davis X. Machina]

Big spikes in Aggregate Virtue.

[Sir Charles]

Ha!

[Morzer]

Something that amused me, amid the madness and the despair:

TwitteringGingrich

[low-tech cyclist]

If I'm The Market, and I'm assessing the creditworthiness of the US, there's one underlying problem with all three of those scenarios is that they're unusual, untested, and not guaranteed to work.

In what sense can they not work?

The House could vote to impeach Obama, and it would fail in the Senate. That's it, as far as I can tell. But everything else would keep on working just as it does now, because the debt limit is completely artificial. If Obama ignores it and nobody can make him pay attention to it, it goes away.

Unless one believes that when a Republican next occupies the White House, s/he's going to have the Treasury refuse to honor U.S. debt instruments issued after mid-2011. Even after seeing the GOP in action over the past few years, I'm having a hard time giving credence to that idea.

[nancy]

DXM--winner takes all.

Morzer--are we surprised? There's something so delicious about the phrase 'Newt-Tweets'. Reminds me of Fig-Newtons.

[Paula B]

This just went up on the NYT:

in mid-July, 66 percent of Tea Party supporters said that Republicans in Congress should compromise on some of their positions to come to an agreement with Democrats on the debt-ceiling increase.

When Tea Party supporters were asked if the debt-ceiling agreement should include only tax increases, only spending cuts, or a combination of both, the majority — 53 percent — said that it should include a combination.
http://nyti.ms/nlD3cf

wtf?

[nancy]

oops--meant iffy tweeters--Fog-Newtons.