Hope and change, meet same old same old.
In the end, though, the bill sold itself. Instead of making the “hard choices” that both Obama and the new Republicans said they wanted, it put many of them off. It will be up to that bipartisan committee to determine where difficult cuts will come.
It was an idea straight out of old Washington: To solve a crisis today, the bill created a crisis three months from now, when the committee’s report is due.
And each party seemed willing to believe that the committee would do what they had wanted all along.
“Some have argued the new joint select committee . . . could pave the way for tax increases,” said Rep. Dave Camp (R-Mich.). “That is not going to happen.”
Even though it could.
House Minority Leader Nancy Pelosi (D-Calif.) said, “It stops cuts in Social Security, Medicare and Medicaid.”
Even though it doesn’t.
Maureen Dowd’s “Washington Chain Saw Massacre” works a metaphor to death, and is boring and pretentious to boot.
Ezra Klein wrote yesterday about Mitch McConnell’s unvarnished honesty. “In a city split between liars and idealists, McConnell is the rarest of all things: an honest cynic. He’s the only powerful politician in America willing to tell you how Washington actually works, and that’s why he needs to be heard.”
On Monday evening, McConnell told Larry Kudlow that Republicans in Congress used hostage-taking tactics to get the debt agreement they wanted from congressional Democrats and the White House — and that, given how well that tactic worked for them, they would not hesitate to use it again.
Economists and financial experts are seeing the makings of a new recession.
The two-year-old U.S. recovery’s staying power may be diminishing as consumers and the government pare spending, say five of the nine economists on the academic panel that dates recessions.
“This economy is really balanced on the edge,” Harvard University economics professor Martin Feldstein, a member of the Business Cycle Dating Committee of the National Bureau of Economic Research, said yesterday in an interview on Bloomberg Television’s “Surveillance Midday” with Tom Keene. “There’s now a 50 percent chance that we could slide into a new recession. Nothing has given us much growth.”
A greater-than-expected slowdown in the first half of 2011 poses risks for the world’s largest economy, said economist Robert Hall of Stanford University, the panel’s chairman. Gross domestic product climbed at a 1.3 percent annual rate from April through June after a 0.4 percent gain in the prior quarter that was less than earlier estimated, Commerce Department figures showed July 29.
“The slower the growth rate, the more likely it is that an adverse shock would cause a recession,” Hall said in an interview.
Consumers are paying down debt instead of spending, and since the government is drastically cutting its spending as well, that means (DUHHH) the economy’s money supply is shrinking.
“Consumption is down because debt repayments are squeezing spending even this long after the crisis,” Hall said. “It will be a painful process until debt-dependent consumers are back on their feet.”
Manufacturers are restraining production in response to weak consumer demand. Manufacturing in the U.S. almost stalled in July, a report from the Institute for Supply Management showed Aug. 1.
Furthermore, the last-possible-minute passage of debt legislation has given the business world the screaming heebie-jeebies.
Business confidence has been shaken by the months-long debate over raising the debt ceiling, Stock said.
President Barack Obama yesterday signed a debt-limit compromise that prevents a U.S. default on the day the Treasury Department had warned the nation’s borrowing authority would expire. The measure raises the nation’s debt ceiling until 2013 and threatens automatic spending cuts to enforce $2.4 trillion in spending reductions over the next 10 years.
“The U.S. debt ceiling debate has, I think, really eroded confidence among consumers and businesses in addition to creating uncertainty,” Stock said in an interview. “The resolution of uncertainty with the compromise doesn’t restore with it the view of legislative competence in economic management.”
No kidding. So tell me again, genius neocons and far right commentators, why trillions of dollars in spending cuts are such a fantabulous thing to do in a recession when no one is spending?