Sunday, July 31, 2011

Booman: "It's Not the End of the World"

As the outlines of the deal start to become clearer, I still don't think this is that bad of a deal. If you stop dreaming about stimulus for a moment and look at what is on the table, it's unlikely to result in some fiasco. First, there's the $900 billion in cuts that Biden signed off on during the negotiations. These cuts are probably specifically designed to do little harm to the economy over the next two years, just like the cuts in the spring. Then there's the joint committee, tasked with raising another $1.5 trillion over the next decade. If it fails, automatic cuts will happen that affect Medicare providers and the Pentagon equally on a one-to-one basis. Additionally, programs designed specifically to protect the poor and veterans are protected.
To me, there are two big downsides. The first is that we've now established a precedent that we will negotiate with terrorists, so we're going to be living with this bullshit for a long time. It's easier to let them shoot the hostage when the result is the National Zoo is closed than when it destroys the global economy, so expect more pushback over the budget.

The second downside is that we couldn't extract any stimulus at all, as far as I can tell. So, this won't hurt the economy much, but it certainly isn't going to help it. MORE...
Howie P.S.: I would like very much to have some "good news" and I HOPE this is it. Unsurprisingly, I see no evidence of "shared sacrifice."

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