Tuesday, February 15, 2011

Deficit Redux

I have written a lot lately about deficit reduction and I am tired so won't re-spill too much ink right now. This link from Ezra Klein is interesting. Andrew Sullivan has been writing with a mix of outrage and hope all day. I am not sure what will happen, and can talk myself into both the most pessimistic and optimistic scenarios.
  • The most pessimistic interpretation is that no long range reduction agreement will happen before 2012, we will have short terms cuts that are harmful, the election will be fought out by both sides saying they are not as bad as the other, and we will be closer to dealing with the real issues only through a debt driven crisis at some point in the future.
  • The more optimistic interpretation is that if President Obama proposed anything out in the open that would kill it, he knows this, and that there are grown ups in both parties who are or will be negotiating in private and the deal pops out later, probably starting in the Senate. I hope the latter, more optimistic scenario is true.
Posted by Don Taylor at 10:27 PM

3 comments:

  1. Ron Paul U.S.A.February 16, 2011 at 3:38 PM

    The whole thing is a circus act, period. No meaningful cuts will ever be made until our hand is forced by the rest of the world.

    http://precisiontradingsolutions.blogspot.com

    ReplyDelete
  2. CasFebruary 16, 2011 at 3:39 PM

    Here's the problem with making any deal:

    *The three factors that will make a long-term impact on the debt are fixing the massive increase in medical spending, raising taxes, and cutting military spending. Nothing else makes any significant impact.
    *The Republicans on balance oppose all three things.
    *Obama proposes an even higher military budget than the Republicans, and already folded on his attempts to raise taxes on the top tier of incomes.
    *Obama already tried to tackle health care costs with some success but even those modest efforts were opposed by Republicans, who now want to repeal them.

    There is no negotiation between these parties that can produce a deal that significantly lowers the debt, no matter who wins the debate on any single point.

    Therefore, your first option is the only possible outcome other than no changes at all. In my view, doing nothing would be better policy.

    ReplyDelete
  3. Pat O'ConnorFebruary 16, 2011 at 4:29 PM

    The whole thing is a circus act, period. No meaningful cuts will ever be made until our hand is forced by the rest of the world.

    Shouldn't we say meaningful cuts and revenue increases.

    ReplyDelete

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