Why isn’t this a deal?

As of right now (7/24/11), per Politico, Democratic leaders are putting together a medium deficit reduction package ($2.7 trillion) with no revenue increases. From my external perspective, it looks like they’re rolling over on their insistence on revenue increases in order to try to put together a compromise package that will be broadly acceptable (I welcome alternative interpretations).

This seems like a big deal to me – giving up on the revenue increases but still achieving a large scale deficit reduction – but the size of the font of the headline on NYtimes.com does not seem to reinforce my interpretation. Republican leaders are working on putting together a shorter term package.

Isn’t this a serious effort at a deal? If not, why not? As an idealist (but not an ideologue!), I am losing faith in Congress’ capacity to function at all.


One response to “Why isn’t this a deal?

  1. I agree that Dems are quaking in their boots and abandoning their governance philosophy by not insisting that tax hikes be part of this compromise. But what is more outrageous is to me is that Dems are retreating from pushing the policies they know are right b/c they want to appease the uneducated opinions of the masses. I am SURE Obama and Reid know the underlying reality of this issue but they know it isn’t what the public wants to hear, and Obama and company aren’t brave enough to try and educate us b/c winning is more important than doing the right thing. The reality is that the debt ceiling is a non-issue. The US is not Greece, we are the biggest and most diversified economic entity in the history of the world. No matter what Boehner and Obama say, we aren’t defaulting. The Republicans use these silly analogies of balancing the national checkbook just like Americans do. I hope they are just pandering to the masses and don’t really think household finances are a model for global macro-economics. We need debt to fund the growth in infrastructure and maintain our ongoing interests (education, health, and fuck yes the military too) that supports our economic engine. Relatively speaking, our debt is cheap – we get cash from other countries at marginally more than it’s current value. If any company (GE, Google) could get cash that cheaply they would borrow, borrow, borrow. And countries buy our debt b/c they know we are fucking blue chip. China doesn’t “own” us, they invest in us b/c they see us as big, diversified and the safest bet in town. This is how macro-economics has worked for 80 years (and global economics were much more volatile before this by the way). The ONLY reason the Dow Jones has sunk in the past few days isn’t b/c the world lacks faith in the American economy, it’s because the world lacks faith that John Boehner has the intellectual depth to understand that our national budget isn’t the same as the family checkbook.

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