No time wasting; no screwing around. We're going into this "looming fiscal cliff" ("more like a dune," according to one savvy commentator) with a leader. Here he is, the guy we elected to a second term:
..Obama, backdropped by risers full of random "real people" as props, struck a fired-up tone as he staked out his position. "If we're serious about reducing the deficit, we have to combine spending cuts with revenue," he said. "And that means asking the wealthiest Americans to pay a little more in taxes."
Over the course of his short statement, Obama hit just about every note anxious liberals were hoping for. He said he would not accept any approach that was not "balanced" between cuts and revenue. He pointed out that this is what a majority of Americans want -- nearly two-thirds, according to Tuesday's exit polls, a result supported by plenty of other polls. And he spelled out his biggest point of leverage: "If Congress fails to come to an agreement on an overall deficit-reduction package by the end of the year, everybody's taxes will automatically go up on January 1," Obama noted. To indicate his willingness to sign the right kind of bill, he held up a pen. ...Molly Ball, The Atlantic
The Congressional Budget Office came out with a new analysis yesterday. "Austerity" is a continues to be a lousy idea.
A new Congressional Budget Office report on Thursday predicted that the economy would fall into recession if there is a protracted impasse in Washington and the government falls off the fiscal cliff for the entire year. Though most Capitol-watchers think that long deadlock is unlikely, the analysts say such a scenario would cause a spike in the jobless rate to 9.1 percent by next fall.
The analysis says that the cliff – a combination of automatic tax increases and spending cuts – would cut the deficit by $503 billion through next September, but that the fiscal austerity also would cause the economy to shrink by 0.5 percent next year and cost millions of jobs.
The new study estimates that the nation's gross domestic product would grow by 2.2 percent next year if all Bush-era tax rates were extended and would expand by almost 3 percent if Obama's 2 percentage point payroll tax cut and current jobless benefits for the long-term unemployed were extended as well. ...HuffPo
While all the argy-bargy about the deficit continues, remember this homey truth: Republicans don't give a tinker's damn about deficits. After all, they've run some stupendous deficits, some of which they've dumped on incoming Democrats. On the contrary. They find the deficit very useful in their sadistic efforts to cut Medicare, dump Social Security.
"The election offered confirmation of something that was actually pretty obvious: some of the most self-righteous deficit hawks are actually much more concerned with using deficits as an excuse to dismantle the social safety net than with, you know, reducing deficits" So sayeth economist Paul Krugman. And he knows what he's talking about. So does Barack Obama, who said it all in a few tough, exhilarating words in the East Room today at a time when it has dawned on millions of Americans that this generation of Republicans do not have the nation's best interest at heart.
James Fallows has an interesting take on what the new term looks like at its outset.
During last year's insanely reckless and unnecessary debt-ceiling showdown, President Obama really did have his back against the wall. Enough members of the super-energized Tea Party contingent were knowingly or ignorantly willing to bring on a technical sovereign-debt default -- in hostage-drama terms, they were willing to shoot the hostage -- that in the end Obama had to ensure that did not occur.
This time his position is more like Bill Clinton's, during his government-shutdown test of wills with Newt Gingrich's super-energized "Contract With America" contingent in 1995. Clinton said: You're willing to close down everything people rely on, because of your pet theory? Bring it on! ...The Atlantic