I’m not happy with the compromise struck between the President, the Senate and the House on the drastic spending cuts in exchange for raising the debt ceiling. Make no mistake, the spending cuts will hurt the poorest and middle class the most, leaving tax loopholes alone for those most able to afford losing them. It’s 1937 all over again folks, when President Roosevelt cut government spending in the midst of a recovering and fragile Great Depression economy that sent things back into a two year recession.
The difference between now and then; Republicans own this one. If Medicare gets cut, Social Security doesn’t keep pace with the cost of living and college education costs more, it’s all due to the hard work of the GOP.
And shame on the Democrats in Congress and the President.
Compromise doesn’t mean capitulation.
And if Republicans wouldn’t compromise now, why should they in two years when we go through this all over again.
If this is a poker game, the President may have laid a careful trap for Republicans. The spending cuts they succeeded in getting will not help the economy, they will not create jobs, they will not reduce the deficit. It’s going to get worse. And when if does, the President can rightly point the finger and blame them for the state of the economy.
But its a sad day in America when one party is willing to destroy the economy for the sake of political gain. Especially when it was the policy of that Party from 2001 to 2007 that rack up more than two-thirds of the debt we now face and brought this nation and the world to the brink of economic disaster.
I’m not the only one that feels this way. NY Times columnist and Princeton University economics professor Paul Krugman writes this in today’s NY Times:
“For the deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status.
Start with the economics. We currently have a deeply depressed economy. We will almost certainly continue to have a depressed economy all through next year. And we will probably have a depressed economy through 2013 as well, if not beyond.
The worst thing you can do in these circumstances is slash government spending, since that will depress the economy even further. Pay no attention to those who invoke the confidence fairy, claiming that tough action on the budget will reassure businesses and consumers, leading them to spend more. It doesn’t work that way, a fact confirmed by many studies of the historical record.
Indeed, slashing spending while the economy is depressed won’t even help the budget situation much, and might well make it worse. On one side, interest rates on federal borrowing are currently very low, so spending cuts now will do little to reduce future interest costs. On the other side, making the economy weaker now will also hurt its long-run prospects, which will in turn reduce future revenue. So those demanding spending cuts now are like medieval doctors who treated the sick by bleeding them, and thereby made them even sicker.