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Krugman writes: "If Obama stands his ground on the debt ceiling, this deal won't look bad in retrospect. If he doesn't, yesterday will be seen as the day he began throwing away his presidency and the hopes of everyone who supported him."

New York Times columnist Paul Krugman. (photo: AP)
New York Times columnist Paul Krugman. (photo: AP)


Perspective on the Deal

By Paul Krugman, The New York Times

01 January 13

 

o make sense of what just happened, we need to ask what is really at stake, and how much difference the budget deal makes in the larger picture.

So, what are the two sides really fighting about? Surely the answer is, the future of the welfare state. Progressives want to maintain the achievements of the New Deal and the Great Society, and also implement and improve Obamacare so that we become a normal advanced country that guarantees essential health care to all its citizens. The right wants to roll the clock back to 1930, if not to the 19th century.

There are two ways progressives can lose this fight. One is direct defeat on the question of social insurance, with Congress actually voting to privatize and eventually phase out key programs - or with Democratic politicians themselves giving away their political birthright in the name of a mess of pottage Grand Bargain. The other is for conservatives to successfully starve the beast - to drive revenue so low through tax cuts that the social insurance programs can't be sustained.

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+39 # df312 2013-01-01 10:25
Throughout this old world
You meet all kind of men
Some rob you with a six-gun
Some with a fountain pen.

War isn't always about bombs and guns and troops. Sometimes it's much more subtle.
 
 
-100 # Scott479 2013-01-01 10:34
Obamabots to the rescue-stand for your man/boy who cannot/will not stand for you!
 
 
+57 # FLAK88 2013-01-01 14:59
I'm no Obama cheerleader, but are you actually stupid enough to have voted for Romney ?
 
 
+3 # RLF 2013-01-02 05:35
With Obama cutting medicare, who needs republicans to f#*k us up?
 
 
+2 # Jonathan Levy 2013-01-04 17:00
It is exactly your assumption that a critic of Obama must have voted for Romney that is the biggest problem. You are so blind that you see no alternative to the theater of dem vs rep., created for ignoramuses to believe we have a two party system, tug and pull, and that Barry is actually your friend. As the record shows and as Scott479 pointed out, Obama's record is as bad and fascist as GWB, perhaps even worse, and Barry and the republicans are working together for their puppet masters, the big banks, creating a theater of democracy, a 6 billion dollar theater of an election.
 
 
+2 # Scott479 2013-01-03 14:15
Down voters and enablers of the deconstruction of our democratic party, please see onsite Amy Goodmans column of today: "Obama's Baleful Continuity With Bush Era" .
 
 
0 # Jonathan Levy 2013-01-04 17:01
Thanks for trying.
 
 
+74 # brianf 2013-01-01 10:44
I wonder why Krugman has fallen for the Republican framing of what is at stake. THAT is the easiest way for progressives to lose this fight. Not only are social security and medicare not the only thing at stake, they should be completely separate from the other issues, since their funding is separate (just look at your paycheck deductions).

Also at stake are taxes (rates and cutoff levels for income tax, capital gains tax, estate tax, Medicare tax, Social Security tax, corporate income tax, even new taxes like a Wall St. transaction tax or fossil fuel tax), tax havens for the rich and corporations, corporate welfare (like fossil fuel subsidies), military spending, and all other spending.

Don't stoop to their level and think about things only in their terms. Look at the whole picture using the values of the people who elected you. An inability to put things into perspective and an inability to bargain are two of the biggest flaws that Obama and Reid have had for the past 4 years. They seem incapable of getting out of that rut.
 
 
+5 # Depressionborn 2013-01-01 16:34
at stake are decent jobs

In 1971, a high school student working a minimum wage job cashed his paycheck in silver dollars at the local bank. Working a seven hour shift after school, he never took home less than 15 silver dollars and often topped 20...
 
 
+7 # RLF 2013-01-02 05:36
I had more savings in the 70's and I had more free time...actually enough to go to protests!
 
 
+3 # BradFromSalem 2013-01-02 05:40
I missed the part in Krugman's article where he endorsed Republican framing.

If your point is one that Krugman did not make framing the debate as critical to breaking down the myths that Neo liberal economists have created, then I agree that a major reframing of the debate needs to occur.

Krugman has discussed the framing issue in previous articles and it is apparent that he fully understands.
 
 
+2 # Scott479 2013-01-02 06:19
Brian, you correctly describe what is wrong with "this picture" in that the cult of personality leads to a singular focus and total inability to hold all responsible parties accountable. Point this out pointedly and watch the minus marks mount, each rendered by enablers.
 
 
+2 # BradFromSalem 2013-01-02 07:24
Scott479,

The majority of the Progressive movement and nearly all the Democratic Party are, as you say, enablers of Back Obama. This is an item that is clearly framed by the Republicans and believed only by Republicans.

Even some of more rational non-tea pot head republicans believe this myth.
 
 
+4 # guyachs 2013-01-02 12:33
You are right but when I see people on tv, there is never someone making this point that social security and medicare have their own funding. Social security has never added a cent to the deficit and, by law, can't. Why can't their be representation for us in this debate?
 
 
0 # Scott479 2013-01-04 08:31
Quoting guyachs:
You are right but when I see people on tv, there is never someone making this point that social security and medicare have their own funding. Social security has never added a cent to the deficit and, by law, can't. Why can't their be representation for us in this debate?

You have to pay for this representation like any other service.
 
 
+102 # balconesfalk 2013-01-01 10:49
It's almost like the goal has become a politico-genoci de. Talk about death panels, the homeless are dying in the streets, the elderly are dying in their own living quarters, unseen and un-heralded, due to lack of enough money for fuel oil. The Republican hold outs are committing child abuse by cutting Head Start and elder abuse by cutting Medicaid. This is outrageous in a so called civilized society, especially when that society has more wealth than any other in the course of human history.
 
 
+17 # readerz 2013-01-01 13:55
Example:
Where my husband grew up, Gerretsen Beach Brooklyn, NY, was very hard hit by Sandy.

Feds promised help. Fo-get about it.
Robin Hood old rockers show promised help. Lots of groups got help: $25,000 went to people to insure they receive wages for work done. But Gerritsen Beach, where all the homes were severely damaged and still have no heat? Where they had expected at least $100,000 from Robin Hood, and that would be only a start? They only received $25,000, and even then, when? Fo-get about it.
Gerritsen Beach, now (finally) called a "zone A" area because every house in the area had been completely under water, is still waiting for help. For anybody actually interested in sending help, not just talking about them, look up gerritsenbeach. net
I'm serious. At the very least, this area needs continuous publicity, so the rest of us can ask them, How 'ya doin'?
 
 
+72 # tswhiskers 2013-01-01 10:50
Well, I am a bit comforted, Mr. Krugman. So we lost only a small fraction of GDP. HOWEVER as you point out, Obama's constantly changing his position does not bode well for the future. How can it be made undeniably clear to Obama and the Dems. that the Reps. thrive on Dem. weakness? They KNOW that the Dems. will always cave on something and therefore they like to think that if the Reps. hold out and hold out, etc., the Dems will likely cave on everything. THE REPS. KNOW THIS! Why don't the Dems. know it too? Here we are with a clear majority in the Senate and growing minority in the House. If the Dems have the sense to vote down the filibuster in the Senate, that would help a lot too. The Reps. need to be cut down to size badly. Is it simply Rep. persistence that Dems fear? For the first in a long time it appear that Reps. have actually compromised on an important bill, but it feels as tho the Dems gave more than the Reps. I hope I'm wrong about this. $450K seems an awful lot of money. I could live like a Renaissance prince on that kind of money, taxed or not.
 
 
+31 # engelbach 2013-01-01 12:28
The Dems definitely gave more than the GOP. No one in the upper income brackets will feel a thing.

The Bush tax cuts were supposed to expire in their entirety two years ago. It's not a "victory" that taxes were restored on those making over $400k AGI.

All the cuts should have been allowed to expire, after which the Dems could have introduced new legislation to cut taxes on AGI below $200k.
 
 
+21 # readerz 2013-01-01 13:59
Even $250,000 seems like a lot of money to me. I thought that they might raise a little at $150,000, but for those who have two salaries and live in expensive real estate areas, that would cost. But I would rather see anybody over $150,000 have to pay more than for the poor to be still cut out of any real decent living conditions in the U.S.
 
 
+3 # soularddave 2013-01-01 19:48
your two salary family still gets the full real estate interest deduction, just like the rest of us. I say we cap that, but not charitable contributions (unless they're going to PACs)
 
 
+7 # RLF 2013-01-02 05:40
You obviously don't live in the Bay area or around NYC. $250k is not rich there. We make more and it goes out just as fast. Maybe we should cut the deduction for 2nd and 3rd houses. Seems like if you can afford a second, you're doing fine.
 
 
+2 # RLF 2013-01-02 05:38
Maybe you would see it more clearly if you make the assumption that the Dems are getting exactly what they want to get.
 
 
+49 # reiverpacific 2013-01-01 11:21
What is deeply disturbing to me is that S.S., Medicare (which are linked and need STRENGTHENING, especially as the recession lingers), Unemployment Insurance and Food Stamps, should not even BE on the negotiating table, and it shows how poor a chance Universal Healthcare has of ever getting on the table (Not shouting, just wish that RSN had italic and underline capabilities).
But then I'm European and accustomed to more humanity in legislation.
-An' ah'm SOOO grateful deah massah-bosses, fuh the gigantic 1.7% cos' o' livin' you done grant me dis yeah (grovel, grovel, kiss feet of owners). Ah'm gon' have a hard time figgerein' out how tah spen' it all!
 
 
+20 # Doll 2013-01-01 15:45
I got a $15./month increase. How about you?

They zinged me for a little more in Medicare too. Not much, but a little.

We went two years without COLA raises.

Ah, but who is going to feed the rich and greedy but us?
 
 
+10 # Patrice Ayme 2013-01-01 11:53
Patrice AymeTruckeeFlag

In his fictionalized autobiographies , and some other discourses, Obama held that the most important notion is not progress, but how to "navigate".

Navigate among what? The powers that be. In the case of his presidency, the powers that be constitute the plutocracy in place.

Those who are genuinely for progress are not about navigating, but about creating, forging, changing things, instead of turning around, seducing the powerful to reach one's personal satisfaction, defined as the highest value.

Obama and other very rich democrats who lead (Pelosi, etc.) actually established the principle of not attacking the plutocracy when they had all the political power in Obama's first few months. They just killed time until their fellow multimillionair es in the republican party could block everything.

Obama will reach port, after his personal navigation, when he is as rich as the Pelosis, Feinsteins, Clintons, Kerrys... That means as rich, or richer, than Romney himself.

In a well established plutocracy, the opposition itself is either plutocratic, or aspire to be. That is what is going on. A Kabuki of the hyper rich, or aspiring hyper rich. Everything points towards a dismantling of the welfare state, and further blossoming of the plutocratic effect.
 
 
+19 # Antemedius 2013-01-01 12:24
As Obama once said to the bankers: "my administration is the only thing standing between you and the pitchforks", and he meant exactly that, apparently.

Politics is an "industry" - a protection racket - and a sucker fleecing racket.

No one in any industry intentionally sets out to reduce their revenue sources.

Most people who go into politics - both republicans and democrats - go into the industry for the same reason most people go into any other industry.

To make money.

Is this some kind of a mystery to anyone?

..........

LIBOR: "The Mob Learned From Wall Street"
http://antemedius.com/content/libor-mob-learned-wall-street
 
 
+2 # readerz 2013-01-01 14:03
I didn't do a thumbs-down because you might be right. I just hope not. If I can't believe in change, at least I can hope.
 
 
+10 # Antemedius 2013-01-01 12:07
"The right wants to roll the clock back to 1930, if not to the 19th century."?

With the right wing corporate puppet president they have in the white house, they're likely to be successful.

Bob Woodward: "This is a confidential document, last offer the president -- the White House made last year to Speaker Boehner to try to reach this $4 trillion grand bargain.... what it shows is a willingness to cut all kinds of things, like TRICARE, which is the sacred health insurance program for the military, for military retirees; to cut Social Security; to cut Medicare."

http://tinyurl.com/bcytexx



Barack Obama, October 24, 2012: Obama laid out an astoundingly ambitious second-term agenda in an interview published Wednesday...

"It will probably be messy. It won't be pleasant," Obama told the Des Moines Register's publisher and its editor by telephone. The daily made the exchange public after the White House dropped its insistence that it be off-the-record.
...
"I am absolutely confident that we can get what is the equivalent of the grand bargain that essentially I've been offering to the Republicans for a very long time...

"We can easily meet—'easily' is the wrong word—we can credibly meet the target that the Bowles-Simpson Commission established of $4 trillion in deficit reduction, and even more in the out-years...

http://tinyurl.com/8e4fxzq
 
 
+25 # in deo veritas 2013-01-01 12:25
This is not a great bargain. It is a despicable sellout. We are at the point where compromise with the teabaggers is unacceptable and immoral. We are at the point as England was when Churchill announced "we are in the presence of a consummate evil". Compromise with these traitors and bigots makes you an accomplice. Evil is evil. There is no such thing as the lesser of the two. If Obama wants to throw away his Presidency then so be it. There is a thing called impeachment but the enemy in the HR won't go for it.
The fical cliff is a fraud created by both parties to get us to accept a rotten bargain like this. Our believing in it or trusting ANY politician is like committing suicide and we have only ourselves to blame.
 
 
+6 # giraffee2012 2013-01-01 14:13
MSNBC just announced the "house" is rejecting / amending the Senate bill - so over the 'fraudulent' fiscal cliff (FC) we go.

Maybe a comprehensive bill will emerge. But too many Congress people are tied to W.S. The FC is not ONLY about the Bush Tax cuts - For example we need Tax reform (to include investigation of off shore accounts that have INCOME buried.)

Off shore $$ is not really so hard to figure out. Every penny I make is turned into IRS. Get my drift?)

We, the people, don't want just tax cuts and medicare, social security (etc) - we want oil subsidies, bank bail outs, military (etc) stopped.

As we know Congress should not have tried trying to rush this "cliff" problem into a few days.

We are going down - and we all will know it's the house GOP/TP who caused our demise.

But actually we won't care who PUT us down when we are in the pits. The TP must be outed in 2014 - 2 years is a long time and can we recover another 2 years of loss?

Do we have hope in the new Congress? More than with this Congress
 
 
+13 # FLAK88 2013-01-01 14:55
The ideas and concepts of the American Republican Party are so fascist that this group would be regarded as a neo-nazi fringe group in most European nations. The only exception would be Greece, which seems extremely desperate these days and unfortunately is playing the nazi 'blame game' against the 'thems'. (Hey ! Just like the GOP, come to think of it !)
 
 
+9 # zitzwitz@mac.com 2013-01-01 15:20
The illusion that we are a Democracy is the result of decades of brainwashing how successful this system is. Feudalism was ended because it exploited the working class which made them wealthy. The working class revolted and thru them out. What is the difference today? A few are in complete power. Instead of having one king, we now have a couple of dozens. The result is exactly the same. If Democracy means every one has a voice, we better start rethinking. The handful who worked hard to eliminate the unions won. The wishes of the populace was eliminated. If it were up to the handful, we all would be serfs.
Why in the world can we not take the best of all Ism's and resist the bad. Before we can digest that however, we first have to learn and be informed of the real differences, good and bad.
Why can't we use the example of many European countries were the union boss is in fact sitting on the board of corporation and both benefit? The ideal of democracy, works a lot better there, than it does here. Ironically the profit and stability and satisfaction has been a plus for both; the owner and the worker as well as society. Unfortunately this kind of argument usually results in the standard answer that this is Socialism. With that distorted belief we are doomed. Capitalism within the framework of a real Democracy has worked wonders and it still could, but not in a way it is handled and preached today
 
 
+8 # rlhollow 2013-01-01 17:00
Could it be it's now time we voters transfer our energies from POTUS to electing Democrats (Real Democrats) to the legislature?
 
 
+3 # pres 2013-01-01 21:14
Obama has been a much better Republican president than he has Democratic.
Republicans should appreciate him more than democrats. Even made windfall profits for Republican operated health insurance corporations simply to be able to eliminate the 'pre-existing condition' exclusion. The list goes on and on...
 
 
+6 # boogysattva 2013-01-02 10:21
8 Ways the 1% Loot the Country



1. Underpay your workers.

2. Loot the treasury with expensive, unnecessary contracts (paid for by bribing the politicians), whether bloated medical, military, or other expenses which have nothing to do with health or national security, only with fattening your pockets, returning billions for the millions you give the politicians.

3. Evade taxes to pay for those expenses.

4. Your underpaid workers pay less taxes, and have less money to spend to stimulate the economy and create more jobs and tax revenue.

5. Cut spending for infrastructure, education et al. for the 99%, claiming “we need to cut the budget” that you just looted.

6. Ship jobs overseas, which gives more money to you and less to the country that nourished you, either in taxes or in jobs which would pay for those taxes and reduce that deficit that you created.

7. Refuse to pay pensions and medical insurance for your employees, so that they wind up using Medicaid et al., thereby looting the treasury even more.

8. Loan the money to pay for those debts, and make MORE money!
 
 
0 # tishado 2013-01-04 00:32
The unspoken issue that is raised in the public debate is why the US is fighting over cuts at a time when spending should increase and why government is being financed by increasing taxes on workers (the end of the payroll tax holiday) when the money needs to come from capital, which has so much money it cannot find places to invest so just sits on it.
 

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