Someday people will look back and wonder, What were they thinking? Why, in the midst of a stalled recovery, with the economy fragile and job creation slowing to a trickle, did the nation’s leaders decide that the thing to do—in order to raise the debt limit, normally a routine matter—was to spend less money, making job creation all the more difficult? Many experts on the economy believe that the President has it backward: that focusing on growth and jobs is more urgent in the near term than cutting the deficit, even if such expenditures require borrowing. But that would go against Obama’s new self-portrait as a fiscally responsible centrist.The whole essay goes on like this, portraying Republicans as obdurate and conservative ideas as mythical. What Drew can't explain is why Obama is losing. Why is the president unable to get a budget and debt ceiling deal. It's not GOP "hostage-taking." Listen to that press conference from yesterday and pay attention to the rhetorical legerdemain. Especially good is how Obama finesses his massive overspending as Bush's fault: "We were expecting a $1 trillion deficit by the time I took office," he lies. And he lies some more by blaming his own deficits on the "recession" and not the failed stimulus and ObamaCare. He's a pathetic political hack. Republicans are the ones "winning the future" here, by standing up for budget restraint. We don't a have revenue problem. We have a spending problem. Democrats just don't seem to learn that key lesson.
Lawrence Summers, Obama’s recently resigned chief economic adviser, said on The Charlie Rose Show in July that he found it “dispiriting” that “all of the energy is on the projected deficits…when the problem right now is that the economy is in danger of stagnating from lack of demand.” The Republicans had made it clear for months that they would use the need to raise the debt ceiling as an instrument for extracting concessions from the Democratic President in the form of more cuts in federal programs. And the President assented to their premise, but only if there should also be some additional revenues. Were they all insane? That’s not a far-fetched question.
The President argued that it’s critical to make cuts that will “get our fiscal house in order,” so that the American people and the politicians would accept the idea of new programs leading to growth and more jobs. But there are numerous indications that the public is ready for such programs now, and serious analysts see no reason why he should not also be taking such steps now, even if this increases the deficit in the short run. But that would be at odds with Obama’s current self-portrayal. People who are looking for work, or worried about their unemployment insurance, or getting their kids to college, may not be impressed with the argument that they must be patient while the President adjusts his fiscal image in time for the 2012 election.
Since the President wanted to cut spending but also increase taxes and the Republicans insisted on cuts with no new taxes, they were for months too far apart to find much agreement on a budget plan to be attached to the debt ceiling increase—which had to be enacted by August 2 to avoid a default. No one could quite believe that this would happen, because it was so unthinkable; it was assumed that the two parties would reach agreement. Each side actually expected the other to be more flexible. The Republicans assumed that the President would be pliable; the Democrats didn’t expect the Republicans to be so inflexible about raising taxes.
See also Los Angeles Times, "Dueling plans for debt ceiling." And New York Times, "Parties Head to Showdown as Obama Warns of a ‘Crisis’." (At Memeorandum.)