The Debt Debate was politically nasty and a sickening display of Washington maneuvering. That’s not to say the negotiations were the worst we have witnessed, especially when compared to the first two years of the Obama administration. Before moving any further, consider the Democrats had a chance to raise the debt limit in the lame duck session in December, when they had large majorities in both houses of Congress.
Bottom line: The GOP came out the winners. They control, what?, one-third of the government, yet, their influence was overly represented in the final product. I say winners because this is what got them elected in the mid-term elections: Cuts, control spending, and reduce the nation’s debt, with no taxes increases. In reaction, commentators are saying the debt deal is decisively a conservative outcome.
Read the three main features of the GOP plan.
The three main features:
- (1)cuts government spending more than it increases the debt limit;
- (2)implements spending caps to restrain future spending;
- (3) advances the cause of a Balanced Budget Amendment Framework accomplishes this without tax hikes, which would destroy jobs, while preventing a job-killing national default.
However, a compromise still has to be struck between the House and the Senate, after which, the winners and losers may not be so easy to point out.
It was a game of bluffs. Most notably was Obama’s “secret plan,” which likely never existed. Not unlike Hitler’s secret weapons. Obama’s strategy was to hold over the heads of Republicans the economy and the obvious repercussions of a failed deal. The public never quite rallied around the president. The strategy blew up in his face. The GOP showed their willingness to push it to the eleventh hour, and Obama soon found out he was a passive spectator. In the end, or perhaps all along, he knew the House GOP would pursue the game of chicken with reckless abandon and if they could muster the will to toe the line, he would have no other choice but to concede. (Needless to say, Paul Krugman isn’t happy.)
Some Conclusions
President Obama’s Keynesian philosophy failed. Despite spending trillions, the economy is failing, unemployment is up, and businesses aren’t hiring. His failed $ 800 billion stimulus packaged only stimulated Keynesian’s imaginations. The rest of us watched the nation’s debt and deficit skyrocket to disastrous levels.
Now that the deal looks to be likely, the heartburn will pass and attention will be refocused on the economy and who has the best ideas to turn things around. It goes without saying that the Democrats and Obama have failed miserably up to this point. That’s why this deal will play as a major catalyst for the smaller government and fiscally responsible advocates that are clearly the majority in the country at this time. The GOP has created a major launching pad for its chances in 2012.
The big picture is that the deal is a victory for the cause of smaller government, arguably the biggest since welfare reform in 1996. Most bipartisan budget deals trade tax increases that are immediate for spending cuts that turn out to be fictional. This one includes no immediate tax increases, despite President Obama’s demand as recently as last Monday. The immediate spending cuts are real, if smaller than we’d prefer, and the longer-term cuts could be real if Republicans hold Congress and continue to enforce the deal’s spending caps (Wall Street Journal)
Donald Douglas at American Power
Republicans positioned themselves well for the upcoming campaign, and with 1.3 percent GDP growth and unemployment sticky at 9.2 percent, there’s lots of reason for the Times to be even more pissed. It’s another case of projection, of course. Progressives are mad. So they lash out, despite their own home-grown failures. Keep an eye out this week for more heated rhetoric from the left. Republicans might stock up on some choice quotes to run later in political ads. Democrats are really sore at losing this round, all the more so since their strategy of do-nothing obstructionism turned out to be a disaster. And we’ve got a presidential election as on the ballot as well. Boy, things are shaping up very well for the reviled teabaggers conservatives.
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