DKos FPer Laurence Lewis (a/k/a Turkana) conveys economist Paul Krugman's commentary, prior to this past evening, concerning the debt ceiling issue. Here’s more from Krugman, below, continuing this theme in Monday’s NY Times. And, yes, he does speak for me.
The President Surrenders
Paul Krugman
New York Times
Augut 1, 2011
A deal to raise the federal debt ceiling is in the works. If it goes through, many commentators will declare that disaster was avoided. But they will be wrong...
(Continued below the fold.)
(Continued from above the fold.)
...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…
…
… Make no mistake about it, what we’re witnessing here is a catastrophe on multiple levels.
It is, of course, a political catastrophe for Democrats, who just a few weeks ago seemed to have Republicans on the run over their plan to dismantle Medicare; now Mr. Obama has thrown all that away. And the damage isn’t over: there will be more choke points where Republicans can threaten to create a crisis unless the president surrenders, and they can now act with the confident expectation that he will…
Slashing spending, as Krugman notes, is the very worst thing our government could do given the current-day realities of our economy.
And, from the editors of the NY Times, today (Monday):
To Escape Chaos, a Terrible Deal
Editorial
New York Times
August 1, 2011
There is little to like about the tentative agreement between Congressional leaders and the White House except that it happened at all. The deal would avert a catastrophic government default, immediately and probably through the end of 2012. The rest of it is a nearly complete capitulation to the hostage-taking demands of Republican extremists. It will hurt programs for the middle class and poor, and hinder an economic recovery.
It is not yet set in stone, and there may still be time to make it better. But in the end, most Democrats will have no choice but to swallow their fury, accept the deal and, we hope, fight harder the next time.
For weeks, ever since House Republicans said they would not raise the nation’s debt ceiling without huge spending cuts, Democrats have held out for a few basic principles. There must be new tax revenues in the mix so that the wealthy bear a share of the burden and Medicare cannot be affected.
Those principles were discarded to get a deal that cuts about $2.5 trillion from the deficit over a decade. The first $900 billion to a trillion will come directly from domestic discretionary programs (about a third of it from the Pentagon) and will include no new revenues. The next $1.5 trillion will be determined by a “supercommittee” of 12 lawmakers that could recommend revenues, but is unlikely to do so since half its members will be Republicans…
And, the immediate reaction from some potential GOPer candidates for President next year? According to the NY Times’ Caucus blog, Huntsman calls it “…a positive step…” Romney will probably say something similar. Bachmann "thinks" (I know, using that word is a stretch) it sucks; and Pawlenty will probably follow suit.
