Debt ceiling hit

[Huzurdaddi]

S&P futures up 1.3% right now, DOW futures up 1.5% those are big numbers for the futures markets.

There is another way: do nothing at all. Then wait for the Bush tax cuts to expire.

That is so cute! Remember how this played out last time? The Republicans will shut everything down before allowing the Bush tax cuts to expire. The only difference is that now they have even more power.

Notably, the GOP wasn’t able to lock those in with this deal. To me that suggests that … they will expire

I didn’t never heard anything about the Bush tax cuts during this episode. I doubt that the Republicans want to extend them they are expiring at a convenient time.

… or the Dems will extract a heavy price for extending them.

I am actually rolling on the floor laughing at the concept of the Dems extracting a heavy price from the Republicans. It hurts! Oh god!

But if you were interested in stimulating the economy, from a Keynesian perspective (2) is better than (1).

You are totally right on this point. I doubt that is the reason why there are no new taxes but it is the one bright spot.

[BigWeather]

The lack of revenue is insulting. But recently I’m starting to think that it may not be as bad a thing as I originally believed.

Suppose you had two bad options to choose from:

1. $2T in cuts, $1T in new taxes.
2. $2T in cuts. No new taxes.

If you want to reduce the deficit, then obviously (1) is better than (2). You can also argue that (1) is more fair than (2), depending on how the cuts and taxes fall. But if you were interested in stimulating the economy, from a Keynesian perspective (2) is better than (1).

Perhaps, but unless the jobs situation improves I don’t think the consumer is going to be spending the difference in taxes. As for no increase in corporate taxes stimulating the economy (presumably in the form of hiring) – nothing in the last few years indicates that’ll happen, sadly.

[Wisbechlad]

Hyperbole much? Japan’s misreading of America’s will to fight in 1941 may not be the worst read in history, but a bit worse than Mike’s.

[Brettmcd]

Hyperbole much? Japan’s misreading of America’s will to fight in 1941 may not be the worst read in history, but a bit worse than Mike’s.

It is Houngan, you have to forgive his lack of intelligence and insight on historical and other matters.

[ckessel]

But if you were interested in stimulating the economy, from a Keynesian perspective (2) is better than (1).

I don’t think so. The 1 trillion in revenue would have come from the insanely wealth who are just sitting their fat asses on it and instead it would go to people that would spend it by not cutting social programs. That 1 trillion would have been made more useful, from a stimulus perspective, than just leaving it where it is now.

[JonRowe]

I am almost at the point of hoping everything just goes into the shitter and the economy collapses yet again.

I wonder how the last huge depression was fixed? I’ll bet it was through huge spending cuts! Clearly history shows that using economic programs for the benefit of the mass of unemployed citizens never works.

You have to spend money to make money? Eff that, lets cut spending and make money!

I am all for reigning in some of the ridiculousness of governmental spending and increasing financial accountability, but now is not the time. The economy is hurting, and the belt that we are tightening by cutting spending looks like it is turning into a noose.

[Lum]

I wonder how the last huge depression was fixed?

A huge public works program involving the building of many tanks, bombers, and aircraft carriers.

[ShivaX]

A huge public works program involving the building of many tanks, bombers, and aircraft carriers.

Its time to invade Canada.

[magnet]

I don’t think so. The 1 trillion in revenue would have come from the insanely wealth who are just sitting their fat asses on it and instead it would go to people that would spend it by not cutting social programs. That 1 trillion would have been made more useful, from a stimulus perspective, than just leaving it where it is now.

Perhaps, but unless the jobs situation improves I don’t think the consumer is going to be spending the difference in taxes. As for no increase in corporate taxes stimulating the economy (presumably in the form of hiring) – nothing in the last few years indicates that’ll happen, sadly.

In my example, the total amount of government spending didn’t change. The extra revenue that you collect from the insanely wealthy or corporations would just go to reduce the deficit. That likely won’t help the economy either.

My point is that giving up on new taxes does not equate to abandoning liberal ideals. It just means that you don’t really care about the deficit. Consider these two options, which might look more familiar:

1. $4T in cuts, $1T trillion in new taxes
2. $2T in cuts, no new taxes

If you don’t care about the deficit, then choosing (2) will get you some extra government spending. Given a choice, I’d give up the new taxes.

[Wisbechlad]

http://kdl.kyvl.org/cgi/t/text/text-idx?c=mans;cc=mans;&idno=Am_Lib_Leag_86&view=toc

“The 1937 Budget: An Analysis of a Proposed Riot of Extravagance Recommended to the Congress with Misleading Official Interpretations and Representing a Brazen Repudiation of the Economy Pledge in the Democratic Platform of 1932,”

The Southern Democrats pushed Roosevelt into a balanced budget, or he balanced the budget to get their support. Didn’t work out too well - though one could argue that it was the monetary tightening rather than fiscal that did the damage

Reading Page 19 - it’s almost word for word the current conservative view

[Dawn_Falcon]

If any of those net spending cuts happen before we get to decent growth (and I’m guessing that’s not happening before the election) Obama’s going to lose re-election and (most likely) hand the Presidency to the Republicans because of the still-crappy economy.

Yea, I mean, the cuts worked brilliantly for the UK…

Oh, what’s that alarm? Oh, that’d be the economy flatlining. bonk

[Alstein]

There is another way: do nothing at all. Then wait for the Bush tax cuts to expire.

Notably, the GOP wasn’t able to lock those in with this deal. To me that suggests that either they will expire, or the Dems will extract a heavy price for extending them.

That ain’t gonna happen, as when they come to expire again, they’ll hold the country hostage again.

[Brettmcd]

That ain’t gonna happen, as when they come to expire again, they’ll hold the country hostage again.

If they do that its because the american people reelected them to power, as the tax cuts expire after the 2012 elections. Also the tax cuts expire unless something is passed, so there is nothing to hold hostage, if they refuse to work with anyone the cuts expire.

[malchior]

If they do that its because the american people reelected them to power, as the tax cuts expire after the 2012 elections. Also the tax cuts expire unless something is passed, so there is nothing to hold hostage, if they refuse to work with anyone the cuts expire.

Seriously? If they don’t control the house, then they will filibuster. They will exploit every weakness in the system and every ‘pressure point’.

[extarbags]

The problem is that more and more people are getting desperate. Tea Party types get elected when people feel they have nothing to lose. I know personally a couple of people that wanted this default. They have no job, they have no 401K, they have no 529, they are saddled with student loan debt. They are disillusioned to the core with America and politics and want to hit the reset button – just to see what happens.

The problem is, that isn’t a reset button. We don’t just start over from zero, like the last two hundred years never even happened. We’d be destroying everything and “starting over” from a position of incredible disadvantage.

They are also tired of being told every time they turn around “pass this or it’ll be economic calamity.” After a while it feels like the boy that cried wolf.

So when they hear on May 1, “pass this or it’ll be economic calamity starting on August 2,” and then the calamity hasn’t happened when they check in on May 15, June 1, July 1, and July 15, they figure it’s just that boy crying wolf again?

It’s hard to prove to anyone that we’d be much worse off without TARP, cash for clunkers, homebuyers’ credit, etc.

It’s only hard to prove that to people who refuse to look at actual facts.

[BigWeather]

The problem is, that isn’t a reset button. We don’t just start over from zero, like the last two hundred years never even happened. We’d be destroying everything and “starting over” from a position of incredible disadvantage.

I know that, and you know that. But for people who have little to lose, or think they have little to lose, they don’t necessarily see it like that. They’re hurt and think that the only way that the ones they feel helped cause this mess will be hurt is if there’s a reset.

So when they hear on May 1, “pass this or it’ll be economic calamity starting on August 2,” and then the calamity hasn’t happened when they check in on May 15, June 1, July 1, and July 15, they figure it’s just that boy crying wolf again?

Nah, that’s just one event. But “pass this or it’ll be economic calamity starting on August 2” sounds a lot like “pass this or the housing market won’t recover” (homebuyer’s credit), “pass this or the auto industry will be sluggish for years” (cash for clunkers), “pass this or the economy will crater” (TARP), and whatever “pass this or unemployment will hit 9%” was attached to…

It’s only hard to prove that to people who refuse to look at actual facts.

Maybe TARP was needed, but I don’t think anyone can prove that homebuyer’s credit nor cash for clunkers did much good at all.

We’re likely sliding back into recession (by the numbers, I’d argue we haven’t truly left it as far as the people are concerned) and the plan we get has spending cuts (which will likely exacerbate things or shift them to the states which are struggling) and no changes on the revenue side? If anything, it should be the other way around, get more revenue, particularly from entities that have proven that they won’t use the cash they’re sitting on to power us out of this recession, and let the cuts (which are needed) come later. Except maybe the defense cuts, those can come now.

[JeffL]

Ya know, and this is just speculation as I drink my first cup of coffee this morning (staying home from work today, family visiting) so this is a non-caffeine crippled thought, but perhaps one fundamental problem is that the Tea Party is the only strong movement or coalition existing right now. I’m not a leftie liberal, but perhaps we need a strong leftie-liberal grass roots movement that balances the Tea Party, or some other equivalent.

My general thought, the Tea Party movement is out there and, while relatively small when you look up the actual data, it is solid. There is no other movement that threatens/forces the hands of Congress in the way the Tea Party does in its quadrant. So the rest of Congress is relatively fractured and unorganized. One organized and strong minority is able to force its way on a relatively unorganized majority?

Thoughts?

[Houngan]

I’m having trouble believing that they can agree to this. It’s the plan waaaay back when that they drafted specifically to fuck over Obama politically. It’s got the election timing, the vote of disapproval, and the necessary veto. Frankly I’m going to be glad to see Obama go simply because he’s a shit president on the political side. Unfortunately the alternative will probably tank the country completely through tax cuts and pork, but at least the GOP has the cunning to pass spending bills in secret to keep the place going.

H.

[ckessel]

In my example, the total amount of government spending didn’t change. The extra revenue that you collect from the insanely wealthy or corporations would just go to reduce the deficit. That likely won’t help the economy either.

Reducing the deficit is not the same as paying off debt. It’s not like the revenue goes to pay off a debt and goes nowhere. It goes to avoiding cutting federal spending, which means people receiving that federal spending still have their salary and/or benefits they can spend, which is better for the economy.

[Anders_Hallin]

I’m not a leftie liberal, but perhaps we need a strong leftie-liberal grass roots movement that balances the Tea Party, or some other equivalent.

I don’t know, it seems there’s a bit of a problem when the union protests in Wisconsin were larger than anything the Tea Party has ever done, the anti-war movement was one of the largest in history, and the media sort of shrugged at it when not being downright denigrating towards them, while they hang breathlessly at every word a Tea Partier says and treats it as being reasonable. And what was the Democratic response to Gore losing in part due to Nader? Running to the left wasn’t really part of it, as I recall (of course, there is a question of tactics there, being threatened in primaries probably matters more).

But I agree, something is needed that pushes state elections and primaries to a greater extent.