- The clearest demonstration in a while that politicians are either simply ignorant or they care more about their own reelection than the country. Not exactly a news flash, but sometimes it comes out more clearly than others.
- You hear a lot that we have a divided Congress. It's important to remember that with filibusters operating how they are operating in the Senate we really don't. What we have is a Republican majority in the House and no majority in the Senate, and while the White House is occupied by a Democrat he obviously has no legislative authority.
- This is basically a Republican deal. All spending reductions, no tax increases, and increasing the debt ceiling. Granted, it's not a Tea Party murder-suicide pact that fails to raise the debt ceiling. But it's absolutely a Republican win.
- Debt ceiling is increased to 2013. I obviously think the mere existence of a debt ceiling is absurd but this is still much better than fighting it out again a few months from now.
- The debt ceiling is really the most important thing - I personally would have been willing to pay a pretty high price to get that. Yes, Obama had other options. I entirely agree. But I don't like the idea of a non-trivial portion of our population who already thinks he's illegitimate and tyrant thinking that he also blanatly flaunted the will of Congress. The fiscal policy outlook looked crappy even if Obama had to resort to these extraordinary measures, which means the economy would have stayed weak regardless. Why piss off that portion of the population unnecessarily? If we could do those extraordinary measures and have a robust fiscal policy I'd say poking the hornets nest might be worth the risk.
- No balanced budget amendment it seems - thank God. I don't know what prospect that had of passing anyway. But that was a supremely dumb idea.
- The language around the plan is odd, but it sounds like discretionary and defense caps immediately, which produces $1 trillion in savings over ten years. I don't know how much cuts that means in the next year or two, which is the important thing.
- Bigger cuts to come after 2013. I would have preferred the emphasis be on this, of course. Drop those caps in the near term and set up two commissions: an entitlement reform commission and a tax reform commission. Announce that we can't hold this long-term debt reduction hostage to the immediate requirements to raise the debt ceiling, so these commissions would work and argue and testify and report to Congress in 2013, when Congress would take up entitlement reform and tax reform. Seize the debt reduction issue by focusing on the actual debt reduction problem (the medium to long-term debt), rather than by caving on the short-term deficits which are not the problem.
The universal explanation
3 hours ago