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Please begin with an informative title:

Paul Krugman argues that the Battles of the Budget, are actually the tip of the iceberg of a "fierce struggle over the future shape of American society," that at its core is really a class struggle.

For the reality is that our two major political parties are engaged in a fierce struggle over the future shape of American society. Democrats want to preserve the legacy of the New Deal and the Great Society — Social Security, Medicare and Medicaid — and add to them what every other advanced country has: a more or less universal guarantee of essential health care. Republicans want to roll all of that back, making room for drastically lower taxes on the wealthy. Yes, it’s essentially a class war.

I'm encouraged by the power of this framing, along with the post Jed Lewison wrote this morning reporting Gingrich says Republicans will 'cave' on their 'dead loser' debt limit bluff. These posts have boosted my confident that President Obama may have much greater negotiating power than I first realized when it come to the debt-ceiling part of our remaining fiscal cliffs.

Krugman asks if the tactical victory Democrats won in the McConnell-Biden bill, might turn out to be a Pyrrhic victory that will set the stage for a larger defeat, if we give into Republican blackmail over the debt-limit and agree to more cuts. But here, he seems to lose his train of thought, and goes off an an odd tangent suggesting the problem with the compromise was the lack of benefit cuts, not the more important argument of lack of more progressive replacement revenues for the 2% of GDP of last 'total Bush tax cuts."

But, I'm less interested in rehashing the pro's and con's of the McConnell-Biden bill than in what we can to to move forward and get our most progressive outcome in the debt-ceiling, sequestration, and a new continuing budget resolution in the next 60 - 90 days.


You must enter an Intro for your Diary Entry between 300 and 1150 characters long (that's approximately 50-175 words without any html or formatting markup).

In this regard, the last half of Krugman's post explains his primary concern for our futrure is that despite the fact Democrats control the Senate and White House so the GOP should be relatively powerless their control over the debt-ceiling remains a threat:

But the G.O.P. retains the power to destroy, in particular by refusing to raise the debt limit — which could cause a financial crisis. And Republicans have made it clear that they plan to use their destructive power to extract major policy concessions. ...

But will Mr. Obama stick to his anti-blackmail position as the moment of truth approaches? He blinked during the 2011 debt limit confrontation. And the last few days of the fiscal cliff negotiations were also marked by a clear unwillingness on his part to let the deadline expire. ... So, as I said, in a tactical sense the fiscal cliff ended in a modest victory for the White House. But that victory could all too easily turn into defeat in just a few weeks.


The key message comes out as support for President Obama's announced position not to negotiate over the payment of debt and spending that the House has already authorized. The 14th Amendment requires that we honor and pay this debt. This morning Newt Gingrich observed what a public relations disaster a debt ceiling hostage crisis would be for the GOP.

So, I'm increasingly confident that President Obama may have a winning hand with regard to the debt-ceiling part of our three crises -- the others being the sequestration, and continuing budget resolutions. We need to rally to support this resoluteness and make sure we do not snatch defeat from the jaws of victory with any last minute caving and major spending concessions in the debt-ceiling part of the negotiations. Any discussions of cuts need to be confined to more progressive and surgically precise replacements for the sequestration cuts, and the continuing budget resolution.

I didn't see this, at first, but  I believe the President is on the right course for the debt-ceiling show-down so I endorse this approach of refusing to negotiate on the debt-ceiling part of this challenge.

In worst case, if the Republicans persist we can continue to escalate the threat of the PCS $1 trillion coin maneuver, which is not mainstream, however, it is legal, and if the GOP chooses to abrogate their responsibility to fund debt and spending they have already authorized, extreme threats may justify out-of-the-box response. Building the credibility of alternative response options, in the background, may represent the best of a "carrot and stick" strategy on the debt-ceiling.

10:34 AM PT: I changed the title slightly at 1:30 p.m. to take out the duplicate use of the word struggle in "class struggle" and struggle over America's future.  This small rewording makes it snappier.

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